Taysha Gene Therapies, Inc. (TSHA) Q2 2021 Earnings Report, Transcript and Summary

Welcome to the Taysha Gene Therapies Second Quarter 2021 Financial Results and Corporate Update Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, August 16, 2021. I will now turn the call over to Dr. Kimberly Lee, Senior Vice President of Corporate Communications and Investor Relations. Please go ahead.

Good morning, and welcome to Taysha’s second quarter 2021 financial results and corporate update conference call. Joining me on today’s call are RA Session II, Taysha’s President, CEO and Founder; Dr. Suyash Prasad, Chief Medical Officer and Head of R&D; and Kamran Alam, Chief Financial Officer. After our formal remarks, we will conduct a question-and-answer session and instructions will follow at that time. Earlier today, Taysha issued a press release announcing financial results for the second quarter ended June 30, 2021. A copy of this press release is available on the company’s website and through our SEC filings. Please note that on today’s call, we will be making forward-looking statements including statements relating to the safety and efficacy and the therapeutic and commercial potential of our investigational drug candidates. These statements may include the expected timing and results of clinical trials for our drug candidates and the regulatory status and market opportunity for those programs as well as patient manufacturing plans. This call may also contain forward-looking statements relating to Taysha’s growth and future operating results, discovery and development of drug candidates, strategic alliances and intellectual property as well as matters that are not 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 and preclinical studies of our drug candidates or dependence upon the 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 a description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 16, 2021. Taysha undertakes no obligations to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as maybe required by applicable securities laws. With that, I’d now like to turn the call over to our President, CEO and Founder, RA Session II.

Thanks, RA. We have made significant progress in the second quarter and continue to achieve important clinical advancements that further support a potential regulatory approval of our most advanced program, TSHA-120, which holds significant promise for patients with giant athermal neuropathy, or GAN. At our R&D Day, in addition to the compelling clinical data demonstrating halting of disease progression as assessed by the well-validated and established motor assessment tool, the MFM32, we presented new visual acuity data from the ongoing Phase 1/2 trial investigating TSHA-120 in patients with GAN. In children and adolescents with GAN, there is an ongoing and progressive deterioration in vision towards blindness, which is understandably one of the most challenging and upsetting symptoms from the perspective of the patient and family. With this new data, we were able to demonstrate a dose-dependent trend towards stabilization of visual acuity, i.e., the ability of AAV9 gene therapy to preserve visual function, which otherwise would be lost. We also discussed in depth the natural history data in GAN that was published in the highly regarded neurology journal, Brain earlier this summer. As a reminder, all GAN natural history data was generated and supported by the National Institute of Neurological Disorders and Stroke, or NINDS under the leadership of the principal investigator, Carsten Bönneman. Included in the publication was the largest cohort of genetically confirmed patients with early and late onset forms of GAN. This large cross-sectional analysis highlighted clinical differences between patients with early onset versus late onset GAN based on performance on the MFM32, a validated and well-known scale to measure strength and motor function as well as other functional motor scales and disease markers. Additionally, a robust assessment of many clinically relevant outcome measures for GAN was performed, including motor, sensory, respiratory, neurophysiologic, MRI and biopsy assessments. Moreover, this was the first clinical study ever to formally and comprehensively evaluate autonomic nervous system dysfunction in a cohort of individuals with GAN. Overall, this natural history study has been instrumental in clinical trial design for the ongoing Phase 1/2 trial and the data included in the Brain publication will serve as baseline data for the natural history comparator arm to the interventional study. As already noted, we remain on track to report clinical data from the highest dose cohort from this ongoing Phase 1/2 trial in the second half of this year and to provide a regulatory update on the program by year end. We have also made significant progress across our preclinical programs. Positive preclinical data for TSHA-102 and Rett syndrome was published also in the Journal of Brain that provided quantitative evidence of MIRA’s ability to exhibit genotype dependent regulation of MECP2 gene expression on a cell-by-cell basis across different regions of the brain in both wild-type and knockout mouse models of Rett syndrome. We recently have productive and collaborative pre-IND CTA discussions with several key regulatory agencies and received positive feedback that support our anticipated IND/CTA submission in the second half of this year. In GM2 gangliosidosis, we were able to discuss in detail at our R&D Day had the existing and in-depth natural history data on this condition informs us about disease progression and in particular motor development delays. We believe these data help provide a comparator for ongoing and future interventional trials. We continue to expect preliminary safety and biomarker data in the Queens University Phase 1/2 trial for TSHA-101 in the second half of this year. Specifically, we will be disclosing HEXA enzyme activity in serum and CSF and expect that 5% HEXA enzyme activity will be considered a positive result. In the U.S., we had a productive and informative meeting with the FDA. We remain on track to initiate a Phase 1/2 trial in the second half of this year. Moving on to our CLN1 program, additional preclinical data for TSHA-118 were presented at R&D Day, which was demonstrated sustained preservation of motor function and rescue with higher doses of TSHA-118 and earlier intervention in CLN1 knockout mice. There are two ongoing natural history studies assessing CLN disease, which will help further our understanding of the disease, inform on our clinical trial design and serve as comparative data in a future trial for TSHA-118. These two studies include a prospective observational study assessing the natural history of CLN diseases and the retrospective and the prospective study to characterize the age-at-onset of major symptoms and the relationship between age and severity. TSHA-118 currently has an open IND. We recently have very productive and collaborative meetings with several key regulatory agencies and positive feedback that support dosing of the first patient, which we anticipate should occur in the second half of this year. TSHA-118 has been granted orphan drug designation, rare pediatric disease designation and fast track designation from the FDA and orphan medicinal product designation from the EMA for the treatment of CLN1 disease. For TSHA-104 in SURF1-associated Leigh syndrome, we announced at R&D Day, new data demonstrating that only a small increase in COX-1 activity can significantly improve the clinical phenotype in these patients, further supporting our SURF1 gene replacement strategy with TSHA-104. Reduced tox activity also correlated with disease worsening in patient fibroblasts, further supporting the impact of COX activity on disease outcomes. This phenomenon draws correlations to other diseases that we are targeting, including GM2 and CLN1, while small increases in activity can have a pronounced physiological impact. We plan to file an IND/CTA for TSHA-104 in the second half of this year. Additionally, a natural history study that is part of our clinical development program is expected to enroll its first patient. This study will follow patients for initial period of time prior to enrollment into the interventional trial. At our R&D Day, Dr. Rachel Bailey, Assistant Professor in the Department of Pediatrics at UT Southwestern, presented positive preclinical data for TSHA-105 in SRC39 deficiency that demonstrated improvement of EEG activity and reduction in seizures and associated deaths in SLC13A5 knockout mice. We continue to advance TSHA-105 towards the clinic and expect that patients currently enroll in an ongoing prospective natural history study would be available to enter our clinical trial. We are currently considering an open label randomized dose escalation Phase 1/2 trial to examine the safety, tolerability and preliminary efficacy of TSHA-105 in the treatment of SLC13A5 deficiency. Biomarkers include citrate levels in the plasma, urine and CSF. Moving on to TSHA-103 in SLC6A1 haploinsufficiency disorder at our R&D Day, Dr. Kim Goodspeed, Assistant Professor in the Department of Pediatrics, Neurology and Psychiatry at UT Southwestern and Dr. Steven Gray, Associate Professor in the Department of Pediatrics at UT Southwestern and Chief Scientific Advisor at Taysha, highlighted the nature of the disease and the positive preclinical data to-date. In SLC6A1 knockout and heterozygous mouse models, CNS administration of TSHA-103 rescued abnormal seizure activity, notably recently obtained positive data demonstrating rescue or functional measures such as nesting, open field activity, hind limb clasping and latency to fall from the rotarod. We are now evaluating dose and age response and finalizing the dose from our preclinical pharmacology experiments. We are also developing an interventional trial protocol. In APBD and Lafora, Dr. Berge Minassian, Division Chief of Pediatric Neurology at UT Southwestern and Chief Medical Advisor at Taysha provided an in-depth discussion about the nature of both diseases at our R&D Day and highlighted positive preclinical data that supports advancement of these programs. Specifically, TSHA-112 reduced GYS1 expression in the APBD knockout model, which resulted in decreased polyglucosan body formation in mice brain. TSHA-111-LAFORIN and TSHA-111-MALIN reduced GYS1 expression in the LAFORIN and MALIN knockout models, which resulted in decreased Lafora body formation in mice brain. We continue to make good progress on both programs and are currently developing an interventional trial protocol. Preclinical data for TSHA-113 in tauopathies presented at R&D Day demonstrated significant reduction in tau mRNA and protein levels, validating the potential use of AAV-mediated gene silencing to achieve lifelong reduction of tau protein levels and supporting further preclinical development for the treatment of tauopathies. Lastly, we were very excited to highlight at our R&D Day on novel approaches to treat Angelman syndrome. We are targeting the entire Angelman syndrome population via knockdown of UBE3A-ATS to unsilenced the paternal allele and also using a gene replacement strategy on UBE3A to mimic the maternal UBE3A allele expression. We have shown compelling fluorescence images of the cerebellum that demonstrates UBE3A expression following administration of TSHA-106, our short hairpin RNA candidates. As you can see, our robust portfolio of clinical and preclinical candidates continues to advance expeditiously. And as RA noted, we have a number of clinical and regulatory catalysts expected in the second half of the year. We will continue to provide updates on our programs throughout the year. With that, I will turn the call over to Kamran to review our financial results.

Thank you, Suyash. This morning, I will discuss our recent non-dilutive financing and key aspects of our second quarter 2021 financial results. More details can be found in our Form 10-Q, which will be filed with the SEC shortly. We recently secured a non-dilutive term loan financing for up to $100 million from Silicon Valley Bank, or SVB, with $40 million available at closing, of which Taysha has drawn $30 million. We have the option to drawdown the remaining tranches subject to certain conditions. The interest rate is the greater of 7% or the Wall Street Journal prime rate plus 3.75% and there are no financial covenants or warrants associated with this financing. We believe that full drawdown of this funding will extend our cash runway through multiple key value-creating milestones, including a potential regulatory approval of TSHA-120 in GAN without the need for additional financing. Moving on, as indicated in our press release today, R&D expenses were $30.6 million for the 3 months ended June 30, 2021 compared to $3.1 million for the 3 months ended June 30, 2020. The $27.5 million increase was primarily attributable to an increase of $10.3 million of expenses incurred in research and development, manufacturing and other raw material purchases, which included CGMP batches produced by Catalent and UT Southwestern. We incurred an increase in employee compensation expenses of $8.5 million, which included $2.2 million of non-cash stock-based compensation and $8.7 million in third-party research and development expenses, which includes clinical trial CRO activities, GLP toxicology studies and consulting for regulatory and clinical studies. G&A expenses were $10.1 million for the second quarter ended June 30, 2021 compared to $0.9 million for the second quarter ended June 30, 2020. The increase was primarily attributable to incremental compensation expense, which included non-cash stock-based compensation and additional consulting and professional fees. Net loss for the second quarter ended June 30, 2021 was $40.9 million or $1.09 per share as compared to a net loss of $21.2 million or $1.95 per share for the second quarter ended June 30, 2020. As of June 30, 2021, Taysha had $197.4 million in cash and cash equivalents. This does not include funds from the recently announced debt financing. And with that, I will hand the call back to RA.

Thank you. [Operator Instructions] Our first question comes from the line of Salveen Richter with Goldman Sachs. Please proceed with your question.

Hey good morning guys and thank you for taking our question. This is Elizabeth on for Salveen. Just wanted to ask if you could provide a little bit more color on the nature of the pre-IND and CTA positive feedback you have gotten from regulatory agencies? And then just I guess more broadly, what are some of the venues that Taysha could present the data into – in the second half of 2021 and just Taysha’s approach to data releases on the forward?

Yes, thanks RA and thanks for the question, Elizabeth. We have had a very, very hectic schedule of regulatory activity over the past few months and that was purposeful. As you know, with our approach to regulatory engagement, we are filing in multiple jurisdictions for each of our programs. So we have probably had close to 10 regulatory interactions which included the FDA and several other countries. And in general, they have been very, very good. The tone has been collegial. We have been able to answer all their questions. There has been very few surprises along the way. I think it would be fair to say that the actual discussions themselves, we focused on a few topics of note, and I’ll bucket them to three categories. One is CMC and a large part of that is potency acid testing. And once again, we have a very similar approach across our programs. We have a very disciplined way of looking at potency. We start all the word early. So that discussion goes well and there is no general surprises there. On the non-clinical side, we have a very robust package of toxicology across all our programs, which include a combination of mouse chronic tox rate 6-month tox and NHP tox, which could be 3 to 6 months. And in general, most of the agency is very favorable there. There is a few slight differences in what the expectations are, i.e., some agencies want a little more in terms of species and duration of time and some agencies want a little bit less. And as we all know, the FDA tends to be a little more conservative. But once again, our plans are very robust and comprehensive. So the multiple agencies are generally very favorable for those. And the third bucket of question usually tends to be around clinical sub-design and endpoints. And once again, we’ve had – we give a lot of thought to our end points we’ve in feedback from patients and families, feedback from key opinion leaders, and we write the protocol in a very disciplined way. We make sure that the majority of our developmental progression assessments are videos and that adds on to a robustness to the studies. And so once again, those discussions go well also. So lots of interactions, lots of very good interactions, and we have a few more yet to come. But I would say that there is been really very little surprises and the engagement has been collegial and very positive thus far. In fact, one of the agencies have said to us at the last meeting. What we’re looking forward to seeing you next time. So I think that’s really just signifies the tone of the conversations.

Great. Thank you so much.

Thank you. Our next question comes from the line of Joon Lee with Truist Securities. Please proceed with your question.

Hi, thanks for taking our question and for the update. So the Rett syndrome, which is a relatively larger indication and a really interesting one, you guided to clinical data by year-end ‘22, but no mention of any biomarker data released in the press release. Are you skipping – are you planning to skip the biomarker data disclosure altogether in favor of the initial clinical data? This one just stood out to us given the planned biomarker data disclosures for the other programs. And also, is your micro active response element, something that is patented? Or is this more of a protected by in-house know-how. And I have a quick follow-up after that. Thank you.

Sure. Well, I can take the question on the biomarker data and then RA can talk about the IP. With regards to the biomarker data, it’s a great question, Joon. I really wish we had a good biomarker for Rett syndrome, many, many scientists and expert clinician physician sciences have been looking for a biomarker for this particular disease. But sadly, there isn’t a good blood-based biomarker or a good CSF biomarker. I think with regard to biomarkers, the best biomarker that we have, which is not very good, is probably EEG. The EEGs of children with the retro abnormal, and it’s possible that we will see a modification in the EEG as an early Rett on the biomarker of activity of the drug. But it’s not really a very good, very established, very robust, well-accepted biomarker, which is why we don’t specifically guide that biomarker day. But if something looks interesting early we will plan to share it. I mean I think the best hope for Rett is really to see what we see from a safety perspective and then from a efficacy perspective thereafter. We are, however, collecting blood and CSF and performing full metabolomics and proteomics analyses. So something does crop up as an interesting useful biomarker, then we will see it there. I don’t hold much hope for that, frankly, because many, many experts have been looking for biomarker for a long time. So ultimately, we do – we are guiding to enrolling the study start in the study by the end of this year and clinical data by the end of 2022. And I’ll hand over to RA now for the IP question.

Excellent. Thank you. And just a quick follow-up for all your programs, given they all use the AAV9 vector, are your starting doses for all the other programs comparable? And is your dose escalation strategy also comparable between programs? Thank you.

Sure, I can. It’s a very good question. And in general, I would say, yes, we are approaching the first dose for each patient in each program. We’re ending up in a relatively similar ballpark of around 5E14 total vg, which as you know, is a high dose being direct brain and spinal cord with a low dose in terms of systemic exposure for compressed to systemic drugs which are dosed vg for [indiscernible]. What I would – where I would say the programs differ a little bit is how aggressively we can accelerate or escalate the doses thereafter. And it depends on a couple of things really. The most important thing it depends on is the therapeutic window that we have. And for several of our programs, we actually have a very broad therapeutic in window, for example, CLN1 or GM2 where you have a secreted enzyme, so where you actually can – a little bit of bit of enzyme goes a long way. But on the converse side, actually overproducing enzyme in supraphysiological quantities actually has no impact as detrimental whatsoever. So for those programs, we can accelerate and escalate the dose in quite rapidly. But then there are programs such as Rett where, as you know, there is a relatively narrow therapeutic window, and we have to be a little bit more cautious in accelerating or escalating the dose, despite the fact that we have the MRI platform, which self regulates the proportion of MECP2 that’s being produced for Rett. So I would say that we generally start in the same ballpark, but then as we escalate the dose is higher, we do that in a slightly different rate dependent on the therapeutic window we have for each program.

Thank you.

Thank you. Our next question comes from the line of Laura Chico with Wedbush Securities. Please proceed with your question.

Good morning guys. Thanks very much for taking the question. My first one, I was just wondering if you could spend a minute on the loan agreement and perhaps why you think this makes sense now? And just wanted to clarify, how does that change the cash runway estimates? And then my follow-up, just around expectations for the 35E14 dose in GAN. You’d already seem to have an effect at the lower doses. So just trying to understand which doses or dose would be advanced commercially? Thanks very much.

Absolutely. Thanks for the question, Laura. Yes, you’re right. As the 1.8E14 dose looks very, very, very, very good. We see clear stabilization of disease progression at that dose. We have patients out just quite some contributable time at that dose, so showing sustainability of effect and that improvement is clinically relevant clinically meaningful. – i.e., it halts the 8-point decline in the MFM32 scale, which translates to an 8-point improvement every year, 16 points over 2 years, etcetera. And also when you run the basin analysis and we have these slides in our in our corporate debt. We know that that 1.8E14 dose patient who is dosed will have a 98.1% chance of a clinically meaningful improvement. So it’s a really solid dose, and the drug would frankly be approvable on that dose. What I will say is that when Carsten Bönnemann and the NIH, and this is a study that’s been run at NIH. And for several years, has been run very, very nicely. Carsten initially set out to other dose response to be going all the way up to 35E14 total vg. Now three patients have actually been dosed at a higher dose, and we will have data to share on the 1-year time put on those three patients in the second half of this year. And my guess is that those patients will either show at least the same as the medium high dose of the 1.8E14 or be slightly better. And for these children with this relentlessly progressive neurological deterioration towards death, you have to give them every best chance of having the most significant clinical benefit. What I will say is that as we approach our regulatory meetings towards the end of this year, we have this really wonderful data package. We will have the 3E14 dose as part of the package. And as you know, we have this great natural history study. We have dose responsiveness. We have clear stabilization of the disease at the medium high dose. I expect there will be at least the same in the high dose. We have long-term safety, long-term efficacy long-term durability. So I am looking forward to having those decisions with the regulators. But in terms of commercializing, I think likely it will be the 2.5E14 dose. But as I said, the 1.8E14 would probably be more than up as well. Let me stop there. Thank you.

Thank you.

Thank you. Our next question comes from the line of Gil Blum with Needham & Company. Please proceed with your question.

Good morning everyone and thanks for taking our question. So do you guys have any thoughts on the recent lifting of the Zolgensma clinical hold on the IT administration? And do you think this is just a change in the way the FDA views the risk benefit for IT AAV gene therapy? And I have a follow-up.

Sure. Thanks, RA, and thanks, Gil, for the question. I think that we’ve had 1 year, 1.5 years where the FDA has seeming to have been clamping down with clinical holds. Both for safety matters and for CMC-related issues in the AAV gene therapy space. I do wonder if that’s changing now. Actually, we have the Zolgensma hold lifting recently. And this morning, we also announced the lifting of the hold once again, AAV9 gene therapy for Danon the Rocket Pharmaceuticals program. So I wonder if there is been a bit of a shift in the perspective of the FDA and they are just getting a little more comfortable spending less time on COVID and more time on gene therapy now. I think specifically with our Zolgensma product, it’s definitely transferable to the wider wider AAV9 space. It’s good news for AAV9. As already mentioned, the clinical data from that intrathecal study in a strong trial was actually very, very positive. We saw clinically meaningful effects on the Hammersmith scale, which is a scale that’s used for slightly older children and the CHOP-INTEND because obviously, you’re going into SMA Type 2 and Type 3. And the doses are in the E14 ranges. So once again, you can learn a lot quite translatable to our programs as well. The issues have been for safety that’s now listed with the NHP study. Our approach to toxicology, as I’ve already mentioned, is very robust. And thus far, in our discussions with the FDA, they have been very accepting for an acceptable for it. So I’m hoping this is shifting the FDA’s paradigm a little bit. But the fact that Zolgensma off clinical hold was good news for AAV as was the lifting of the hole for Danon disease this morning as well.

Alright, thank you for all the color. And could you maybe give us an idea of the number of patients that you can currently treat with the GMP runs that you’ve conducted? Would these be sufficient for your initial clinical studies and the programs that you mentioned?

Great. Thank you for taking our question and congrats on the progress.

Thank you. Our next question comes from the line Eun Yang with Jefferies. Please proceed with your question.

Thank you. I have a couple of questions regarding 120 on the clinical and regulatory update that we are expecting by end of this year. So will the highest core high-dose core data come out before the regulatory update? So that’s the first question. And second question is, so you’re going to be requesting on end of phase meeting with the FDA and engage you with AAV by year-end. So do you think you would have an update from the regulatory agency discussions or is it possible that you could request a meeting and waiting for the meeting to happen potentially early next year? Thank you.

Okay, thank you for the clarity. And I have one quick question on the financials. So in second quarter, R&D, you have around $10 million in R&D manufacturing and other raw material purchases. So going forward, the third quarter, I mean, second half of this year, should we assume that R&D increases quarter-over-quarter would they be more normalized from second – the first quarter run rate? Or with all the clinical programs are advancing. And would you expect R&D to increase from the second from the second quarter run rate? Thank you.

Yes. Thanks, RA and thanks for the question, Eun. So ultimately, as we continue down the clinical trial initiation, numerous programs in our portfolio, you can expect to see some additional clinical trial expenses getting incurred in second half of this year and into 2022 as well.

Okay. Thank you very much.

Thank you. Our next question comes from the line of Raju Prasad with William Blair. Please proceed with your question.

Thanks for taking the question. I kind of just want to understand how the kind of commercial scale-up and identification of patients is going, maybe particularly in 120, a lot of questions that we get are kind of related to how big that market opportunity is. So, maybe if you could just talk about the number of kind of prevalent patients that you have identified and how you are kind of looking at building up the commercial scale up? And then I got another follow-up.

Great. Thanks. And then with the FDA panel coming up next month, obviously, we have seen some clinical holds come off with Zolgensma as well as Rocket’s Danon disease program this morning. I just wanted to kind of get your thoughts on how to look at how are you guys looking at that that panel moving forward?

Sure. Yes. Thanks for the question, Raju. I think, yes, it’s going to be interesting. I am looking forward to seeing the panel, actually in seeing how the discussion goes. The way the FDA have structured the panel looking at five specific areas. They look for integration and oncogenicity risks, toxicity, thrombotic microangiopathy tissues and the nonclinical front of toxicity especially related to DRG and then clinical finds on neurotoxicity that based on brain MRI findings. So, I think we are actually just looking forward to listening and learning. All those five areas that if they are talking about, we have given us some considerable thought to and have mitigated against them, both by looking at them, looking for some of these issues, specifically in our preclinical work. For example, we look at DRGs in all of our preclinical NHP studies now. And thus far, we haven’t seen any signs of DRG inflammation. And not just looking at things from the nonclinical perspective, but you also build in appropriate mitigations into the clinical trial design as well, i.e. we built in monitoring to local hepatotoxicity tissues. We have built in clinical monitoring to look at platelet counts, which gives a clue to early issues with thrombotic microangiopathy. We look at – we actually have – it’s been an interesting discussion with the regulators just in general about how to monitor for DRG inflammation over – in the clinical trial. And essentially, we come up with a good plan that the regulator has been very acceptable of, which is looking at reflex testing periodically at each visit. So specifically, the six reflexes in the body, ankle, knee, etcetera. And also nerve conduction studies at baseline and the three-month period to the first year thereafter. So, we have been giving this a lot of thought. I am not expecting to hear anything at this meeting that’s a big surprise to us. I am hoping to learn more that I am hoping to go into more detail around the mechanism of what’s happening. And I am also hoping that they take the safety issues that they are thinking about considering and they look at it from the context of the balance of risks and benefits in the patients because once again, for the patient communities that we are trying to serve, these are children who have demonstrating will offer the rapid progression towards that. And in that context, some minor safety issue should not be – should not preclude a charter being included in the clinical trial or being dosed.

Sure. And yes, it’s a good reminder. Alright. Thank you. Yes, we recently conducted another study in the – for our GAN program, specifically in NHP study that looked at our re-dosing approach. But as part of that assessment, we actually gave a clinically meaningful dose of GAN factor and re-dose these NHPs, re-dosed some of these NHPs eight weeks subsequent to dosing. And we took on all the NHPs, those that received both one dose and those that had received two doses. And we looked very carefully of any signs of toxicity or inflammation in the new property. And with a specific focus, of course, there is lots of interest in the DRG and spinal cord and neuronal tissue. So, no evidence whatsoever of any kind of information in any of the samples we took. So, from our perspective, it was very reassuring and it’s specifically a vector is already in the clinic at the moment for us.

Great. Thanks.

Thank you. Our next question comes from the line of Yun Zhong with BTIG. Please proceed with your question.

Hi. Thanks very much for taking my questions. So, first question on GM2 program. Do you expect the biomarker data to include substrate reduction? And how long do you think the patient will need to be followed for you to see any signals suggesting clinical efficacy, please?

Sure. Thanks Yun, for the question. I think it’s an important question, just the cadence of events, what’s going to happen after we dose a patient with GM2, what’s the normal course, what’s the expected course of events. So, RA is quite correct and that the biomarker data we will be showing will be HEXA levels in the CSF and in the blood. You asked specifically about GM2 ganglioside reduction. We are, of course, measuring that. My guess is that will take a little bit longer than the HEXA to change. And so that will be – there is also a late disclosure. And in terms of clinical improvement, my hope is that I anticipate – if you think about the cadence of events, you dose a patient, you should get much more transient expression, maybe three weeks after dosing. So, I guess by the first month, you should be seeing a nice increase in the HEXA activity. And then by three months after initial dose, it should be maximal. My guess is that the clinical stabilization, you wouldn’t start to see until about three months. I would hope to see the beginnings of some change in clinical progress by about three months. It may take even longer, it may be six months. But my guess is that treatment will start seeing the signs of [indiscernible].

Okay. And then on the Rett syndrome program, do you have a target range that you hope to see that the gene transiting expression will fall into that range or would you just rely on the self-regulatory mechanism of the technology to look more on the clinical kind of the end point, please?

Yes, this…

Well, I will start – alright you jump in if I miss anything out. It’s a really good question Yun. And it’s been – we have had a number of advisory boards for Rett, and we have asked everybody the same question, what is the – what is our range of MECP2 expression, is it – do we need to get exactly 100%, is it between 80% and 120%, what’s the upper limit? We know that 200% is too much because you get degradation, but there is 150% levels okay. And none of the clinicians can answer that. What I will say is that in the animal studies, when you hit about 150%, that was a MECP2, you are starting to see some kind of deterioration. But our intent is to try and keep the level of MECP2 generally physiological, i.e., about normal, being a little bit more conservative. The way Steve Gray has designed the microRNA binding sites. They just they run a little bit lower, lower than 100%, so between 90% and 100% levels of expression. Now of course, we can’t measure MECP2 expression in a chart because in order to do that, you would have to buy up to the brain and look at levels of MECP2 expression. So, it’s technically possible, but ethically, you wouldn’t be able to obviously take that biopsy except, of course, in the unfortunate penicillins to die would perform an autopsy and get the data in that way. But we wouldn’t be able to measure MECP2 expression in the clinical setting in the vast majority of cases. And so we are going to be relying in particular on clinical treatment. But the target is going to be physiological levels, which the self-regulatory feedback loop is able to obtain very, very nicely.

Great. Thank you.

Thank you. Our next question comes from the line of Mike Ulz with Morgan Stanley. Please proceed with your question.

Hi guys. Thanks for taking the question. Just for the GM2 program, you are on track to give an update sort of later this year. But assuming you get positive results there, are you planning to advance a single dose into the Phase 1/2 U.S. study or might you decide to advance multiple doses there? And then secondly, do you need to make any process modifications to the material you plan to use in the U.S. study versus the material that you are currently using in the Queens study? Thanks.

Sure. Yes. Thanks for the question, Mike. And the good thing about GM2 is one of the programs that has this very wide therapeutic window that I have already touched on i.e., you don’t need much to get a significant improvement. We are seeing 5% levels of enzyme will be more than enough to result in dramatic improvement. And I would say this based on the current data that exists that show that infants for the disease have less than 0.1% activity of HEXA. When you go up to about 2% to 3%, i.e. the adult forms of the disease, they actually have a normal life span by that. So, if you are hitting 5%, then more likely, that will be enough to give you quite a dramatic clinical improvement. So, you don’t need much to get to a level that results in considerable clinical improvement. On the other end, you can actually express the enzyme super physiologically, and we have seen this in our toxin pharmacology, preclinical work. And it’s a very safe enzyme. So, you can actually express it super physiologically on the other end. And there are no adverse consequences there. So, we have a very broad therapeutic window. Now to give you some context, 14 total VG is a high dose being given intrathecally, but it’s a relatively low dose in comparison to systemic administered gene therapies. So, we actually think that we are likely to have quite a significant benefit with our 5e14 dose. Now if we are seeing a good benefit in that 5e14 dose from a biomarker perspective and more important from a clinical perspective, we will probably just go ahead with the 5e14 dose in the in the U.S. study and file on that data. If indeed, we think there is room for improvement. We have absolutely the opportunity to go higher if we need to. My guess is we would probably go from a 5e14 to 1e15 total VG. So, we have that possibility of doing that. The study designed for the U.S. is not fully finalized yet, and I think it’s fair that we are going to learn a little bit from the Canadian study before we actually finalize the design of the U.S. study. But 5e14 I think is likely to be good enough. But if there is any potential room for improvement, we absolutely haven’t scoped to go to the 1e15 dose.

Great. Thank you.

Thank you. Our last question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Hi, good morning. Thanks so much for taking my question. For the GAN program, could you please discuss what you hope to see on some of the assessments beyond MFM32, including muscle strength and brain imaging, especially in light of the understandings and the correlation that were reported with MFM32, including in the recent Brain publication? And I guess, specifically, what signals would help you further validate that the gene therapy is slowing down the disease progression? Thank you.

Sure. Thanks for the question, Kristen. And I could probably spend a good 10 minutes or 15 minutes talking about this. There is such a wealth of data being collected in this NIH study is really remarkable. So, we have seen the MFM32, which is – I always describe it as CHOP INTEND for older children. You have got three domains looking at central strength, proximal muscle strength of arms, shoulders and hips and distal strength, fingers and toes. And we see clear stabilization of disease at the medium, low and the medium high dose in this progression. MFM32 drops by eight points a year in kids with GAN. This is a clinically significant decline every year. Four points to forget is deemed to be clinically meaningful. And we showed clear stabilization of disease at that medium, low and the medium-high dose. In conjunction with that, as RA has mentioned, we have now presented some data on vision and visual acuity. And specifically, we look at something called the LogMAR. And this is a bit like the snow and chart. When you get to the opposition, you sit there and you read the letters off the wall. The LogMAR does this within a more rigorous kind of research-focused manner. And what we have seen in patients that have been treated, we have seen a dose response difference in stabilization of LogMAR. So, children who have GAN, their vision deteriorates over time. And it’s one of the most significant, most worrisome clinical effects. I think one of the things that parents worry about so much the fact that child loses their ability to see because more than anything it means they stop being able to communicate in the same way as that also moves the ability to articulate words and hear, for example. So, it’s very troubling from a patient and family perspective. And what we see, and there is a nice slide in our corporate deck now, you see that a lot loss going about 0.3 when you need glasses, score of about 0.6 is when you have significant visual deterioration when you are hitting about 1.3, that’s when you are legally registered as being blind. After the vast majority of patients, apart from one outlier in our data set, the LogMAR scale deters over time and progresses towards blindness. When you treat you actually halt the decline. So, it’s similar to the MFM32 where visual acute is declining, you treat and then suddenly it stabilizes out at the level of function. So, you are preserving vision for the duration in these children. Certainly, we have seen a significant duration of visual preservation in this particular study. So, vision is key. In terms of other endpoints, we are looking at neuropathy type scores and looking at sensation. My guess is that sensation is going to improve or stabilize, but it’s one of those parameters that’s quite hard to measure. You also alluded to muscle strength. My guess is that muscle strength will also improve already stabilized the ongoing deterioration in myometry will stabilize. And I think that’s also true for some of the other major assessments such as the time tell me to walk test, they [indiscernible] etcetera. And Carsten and the team were also looking at respiratory muscle strength, and I anticipate once again that the forced vital capacity will stabilize, the way the MFM stabilizes out. And I say these things with confidence because all of these assessments are highly, highly correlated in the natural history study in the brain paper that you mentioned earlier. Now in addition to the clinical measures, we are also doing a number of tests in the study as well. So, we are performing nerve conduction studies i.e., looking at electrophysiology, looking at MRI scans. And also importantly, we are performing biopsies in these patients, too. I am looking forward to seeing how the days will pan out, but my guess is the vast majority will reflect in there, what we have seen is the MFM32.

Great. Thank you for taking my question.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back to Mr. Session for any final comments.

Thank you. And this concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.