Taysha Gene Therapies, Inc.
Q4 2021 Earnings Call Transcript

Published: 31 Mar 2022

[Operator:]

Welcome to the Taysha Gene Therapies, Fourth Quarter and full-year 2021 financial results and corporate update. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will hold a brief question-and-answer session. As a reminder this call is being recorded today March 31st, 2022. I will now turn the call over to Dr. Kimberly Lee, Chief Corporate Affairs Officer. Please go ahead.

[Kimberly Lee:]

Good morning and welcome to Taysha's fourth quarter and full-year 2021 financial results and corporate update and conference call. Joining me on today's call our RA Session II Taysha's President, Founder, and CEO, 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 fourth quarter and full-year ended December 31st, 2021. The 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 product candidates. These statements may include the effect of timing and results of clinical trials for a product candidate. Our expectations regarding the data necessary to support regulatory approval of Taysha 120. The regulatory status and market opportunity for our clinical programs, as well as patients manufacturing plants. This call may also contain forward-looking statements relating to Taysha’s growth and future operating results, discovering development and product candidates, strategic alliances, intellectual property, cash runway, and improvement limitation, and potential impacts of our strategic pipeline prioritization initiatives, as well as matters that are not of historical facts or information. Various risks may cause 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 product candidates are dependent upon strategic alliances and other third-party relationships. Our ability to obtain patent protection for discoveries, limitations imposed by pans owner controlled by third-parties. And then requirement of successful funding to deduct our research and development activities. For listened 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, March. 31, 2022. Taysha undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, as so as maybe required by applicable securities law. With that, I'd now like to turn the call over to our President, founder and CEO, RA Session II. RA?

[Suyash Prasad:]

Thanks RA. Recently, we reported positive initial clinical data for GAN GM2 gangliosidosis and CLN7 disease further validating the therapeutic potential platform in multiple diseases of the central nervous system. Let's begin with Taysha 120 for the treatments of GAN. Taysha 120 is the first gene therapy to be interested equally dosed, and is this currently being evaluated as approximate groundbreaking historic dose escalation clinical trial at the NIH, under the leadership of the principal investigator, cost and dominant. We recently reported positive clinical efficacy on safety data for the high dose cohort of 3.514 total VG, as well as long-term safety and durability data across all therapeutic doses. Treatment with Taysha 120 achieved a clinically meaningful on statistically significant slowing or halting of disease progression seen in the highest price cohort of 3.58014 total BJ on cross-sold therapeutic dose cohorts. At the highest dose, Taysha 120 demonstrated clinically meaningful and statistically significant improvements in MFM32 score by year-one compared to natural history. Additionally, long-term durability data across all therapeutic doses demonstrated a 10-point improvement in the main change from baseline and MFM32 score by year three compared to the estimated natural history decline of 24 points. These long-term data confirmed with disease modifying effect on sustained your ability of TSHA-120. Notably, no biopsy data, pre and post-treatment with TSHA-120, provided evidence active regenerations, of fibers thereby demonstrating pathological improvement to complement the clinical benefit saying. In addition, preservation of visual acuity as measured by the lock Moscow was observed. And this was in conjunction with improvements in retinal nerve fiber last thickness as assessed by optical coherence tomography. So, no significant safety issues and no increase in adverse events at high doses. All adverse events relate to immunosuppression of study procedures were comparable to other Gene therapies and trends into night shop. There were no dose-limiting toxicities reported following treatment with TSHA-120. No evidence of dorsal root ganglion inflammation, and no evidence of thrombocytopenia. Overall the states that's the most comprehensive Gene therapy dataset in GAN, offering TSHA-120 a potentially de -risk regulatory path. We believe this program currently meet the most registration requirements based on FDA and EMA's guidance for Gene therapy for neurodegenerative diseases. We look forward to our continued discussions with major regulatory agencies on potential registration pathways for TSHA-120 and anticipate a regulatory update by mid 2022. As a reminder, TSHA-120 has already received Orphan Drugs and Rare Pediatric disease designations from the FDA. We also have partnerships in place to help raise awareness and facilitate early diagnosis of GAN. This includes a partnership with GeneDx, the global leader in genetic testing, to include a genetic marker to test for GAN and the GeneDx routine Hereditary Neuropathy screening panel, which is free of charge to individuals at risk of, or suspected, of having GAN. It's also includes collaborations with Hereditary Neuropathy Foundation and the Charcot-Marie-Tooth Association Centers of Excellence, as well as healthcare professionals on patient advocacy groups to increase access to genetic testing. Turning to Rett syndrome, TSHA-102 is the first and only Gene therapy and clinical developments for Rett syndrome and is designed to deliver MECP2 transgene using our novel miRARE platform, or micro RNA Responsive Auto-Regulatory Element platform. This technology is exclusively licensed to Taysha and developed by Doctors and Steven Gray of UT Southwestern Medical Center. MRI is designed to provide a sophisticated regulation of transgene expression, genotypically on a cell-by-cell basis, delivering controlled expression, toxicity associated with excessive levels of MECP2. We were very pleased to announce earlier this week, initiation of clinical development for TSHA-102 with the acceptance of our CTA by Health Canada in March. Sainte -Justine, mother and child university hospital center in Montreal, Quebec, Canada has been selected as the initial clinical sites under the direction of Dr. , principal investigator. We also announced positive preclinical data that supported the CTA acceptance, including the pharmacology study and reps knockout mice assessing the efficacy of TSHA-102, and the six-month GLP toxicology study in non-human primates, exploring the budgets attributions and mechanism of action of TSHA-102. Taysha 102 has a robust preclinical data package that supports and validates the ability of miRARE to safely regulate trends Gene expression. Data from the CTA naive and pharmacology study in last models syndrome demonstrated that miRARE regulated trends Gene expression, improved survival, respiratory function, and motor of function assessments across multiple dose levels. A onetime intrathecal injection of Taysha 102 significantly increased survival at all dose levels with a mid to high doses improving survival across all age groups compared to vehicle treated controls. Treatment with takes you want to significantly improved body weight motor function on respiratory assessments and MECP2 knockouts mice. An additional study in the is currently ongoing with preliminary data suggesting normalization of survival. Positive CTA enabling GLP toxicology data, non-HP reinforced Taysha launches favorable safety profile across all dose levels tested, including doses up to four fold above the Brazilians clinical stocks index. These data supported by distribution as reflected by DNA copy number in multiple areas of the brain on sections of spinal cord. Perhaps most importantly we observed correspondingly low levels of MRNI across multiple tissues. This indicates the MRAP down regulation is appropriately minimizing a trends gene-expression from the construct in the presence of endogenous MECP2 in these wild-type NHP as expected. Let me repeat that. High levels of DNA in target tissues, meaning that there's good distribution of drug from NHP conjection. But low levels of MRNA, meaning that the down regulation by the MRAP is working well to minimize any toxicity. Indeed, low toxicity from trenching expression was observed, which was confirmed by functional evaluations, demonstrating no detrimental change in near behavioral assessments, and histopathologic evaluations demonstrating no adverse tissue findings on necropsy. Collectively, these data further support the therapeutic potential, safety and tolerability of TSHA-102 to treat Rett syndrome across a broad dose range. These pre -clinical safety and efficacy data will be presented at the International Rett syndrome Foundation. Rett syndrome scientific meeting taking place April 26 to 27, 2022 and Nashville, Tennessee. Currently, there are no disease modifying therapies to treat over 350,000 patients, estimated the suffer from Rett syndrome worldwide. We're excited to advance TSHA-102 as the first Gene therapy and clinical development for the treatments of this devastating neurodevelopmental disorder, and look forward to reporting preliminary Phase 1-2 clinical data by the end of the 2022. As a reminder, TSHA-102 has been granted Rare Pediatric Disease designation and Orphan Drug designation from the FDA, and more recently Orphan Drug designation from the European Commission. For GM2 gangliosidosis, TSHA-101 is the first, and only bicistronic vector in clinical development, representing an important first for the field of Gene therapy. Driven by the same promoter, TSHA-101 expresses both the HEXA gene, coding the alpha sub-unit, and the HEXB gene, coding for the beta sub-unit, in a one-to-one ratio, enabling the production of functional heterodimeric beta-Hexosaminidase A, and providing the ability to restore and normalize enzyme activity in GM2 gangliosidosis using one vector. We reported initial positive by-market data in January for TSHA-101, demonstrating normalization to beta sub-units of Hexosaminidase A or HEXA enzyme activity in patients with multiple forms of GM2 gangliosidosis. We shared data for two patients, including Month 1 and Month 3 analysis for patient with Sandhoff disease, and Month 1 analysis for patient with Tay-Sachs disease. Following one particular demonstration, TSHA-101 achieved HEXA enzyme activity of a 190% of normal at Month 1, and 298% at Month 3, in Patient 1 with Sandhoff disease, representing 38-fold on 58-fold above the presumed asymptomatic level of 5% of normal identified by natural history at Month 1 and Month 3, respectively. Patient 2 with Tay-Sachs disease, achieved HEXA enzyme activity of 25% of normal at Month 1, which represented 5-fold above the presumed asymptomatic level of 5% of normal identified by natural history. Preliminary data suggested that TSHA-101 was well-tolerated with no significant drug-related events in both patients. The unfortunate death of Patient 1 was attributed to pneumonia and pleural effusion with a concomitant hospital-acquired MRSA infection. The independent Data Safety Monitoring Board agreed with the initial assessment from the principal investigator and confirmed that the patient's death was unrelated to study drug. patient two continues to progress well, and we're continuing to monitor patients two and three. We do not intend to perceive further enrollment in the Phase one two trial at this time due to prioritization of programs that increase operational efficiency. But we will continue to follow the patients who were previously dosed. Well, CLN7 we reported posted preliminary clinical safety data for the first-generation construct in CLN7 investment disease from the ongoing clinical trial in collaboration of UT Southwestern Children's Health and children Medical Center Foundation. We recently dosed a fourth patient at 1E15 total VG, bringing the total to three out of the four patients dosed at 1E15 total VG, which is the highest dose ever safely administered in particularly in humans with Gene therapy. Dose escalation from 5E14 to 1E15 total VG was supported by the data safety monitoring board. Initial data for three patients supported a favorable tolerability, on safety profile with no major adverse events across doses. Further development of sale and seven program will focus solely on the first-generation construct in collaboration with our existing partners. In 2022, we expect several potential value-creating catalysts, including regulatory feedback for TSHA-120 and GAM by mid-2022, and preliminary Phase 1-2 data for TSHA-102 and Rett syndrome by year-end. Clinical developments of the first-generation constructs, the CLN7 remains ongoing with our existing partners. We will continue clinical development of TSHA -118 in CLN1 night in sale on one disease and expect to initiate clinical development of TSHA-105 in SLC13A5 deficiency this year. With that, I'll turn the call over to Kamran to review our financial results Kamran.

[Kamran Alam:]

Thank you. Suyash. This morning, I will discuss key aspects of our fourth quarter and full-year ended December 31, 2021 financial results. More details can be found in our Form 10-K, which will be filed with the SEC shortly. As indicated in our press release today, recent development expenses were $37.9 million for the three months ended December 31, 2021, compared to $12.3 million for the same period in 2020. Research and development expenses were $131.9 million for the full-year ended December 31, 2021, compared to $31.9 million for the full-year ended December 31, 2020. The $100 million increase was primarily attributable to an increase of $38.3 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 also incurred an increase in employee compensation expenses of $32.7 million, which includes $7.1 million of non-cash stock-based compensation, due to an increase in the employee headcount in the research and development function. We also incurred an increase of $29 million of third-party research and development consulting fees, primarily related to GLP toxicology studies, clinical study CRO activities in consulting for regulatory and clinical studies. In general, administrative expenses were $11.8 million for the three months ended December 31, 2021, compared to $6.1 million for the three months ended December 31, 2020. General and administrative expenses were $41.3 million for the full-year ended December 31st, 2021, compared to $11.1 million for the full-year ended December 31st, 2020. The full-year increase of approximately $30.2 million was primarily attributable to $16.3 million of incremental compensation expense, which included $7.7 million of non-cash stock-based compensation due to increases in employee headcount. We also incurred an increase of $13.9 million in professional fees related to legal, insurance, investor relations, communications, accounting, personnel recruiting, market research, and patient efficacy activities. Net loss for the three months ended December 31st, 2021 was $50.4 million or $1.32 per share as compared to a net loss of $18.3 million or a $0.50 per share for the three months ended December 31st, 2020. Net loss for the full-year ended December 31st, 2021 was $174.5 million or $4.64 per share compared to a net loss of $60 million or $3.40 per share for the full-year ended December 31st, 2020. As of December 31st, 2021, Taysha had $149.1 million dollars in cash and cash equivalents. Our strategic pipeline prioritization initiatives along with existing cash and financing under the current debt facility is expected to extend cash runway into the fourth quarter of 2023. And with that, I will hand the call back to .

[Operator:]

Thank you. At this time will now be conducting a question-and-answer session. . For participants using speaker equipment, it maybe necessary to pick up your handset before pressing the star keys. So that we may address questions for as many participants as possible, we ask you to limit yourself to one question. One moment, please while we poll for questions. Thank you. And our first question comes from the line of Salveen Richter with Goldman Sachs. Please proceed with your question.

[Elizabeth Webster:]

All right. Good morning. This is Elizabeth on for Salveen. Just given the strong data that you had for GM2 this year, I guess, why choose to de -prioritize that program?

[Operator:]

Thank you. Our next question is from the line of Joon Lee with Truist Securities.

[Joon Lee:]

Hi, thanks for taking our questions. In addition to restructuring, would you also consider monetization of some of non-core programs via out-licensing or partnering? And then also our understanding is that the term loans from SVB is contingent upon you having three active programs. So in addition to GAN, or Rett, do you plan to have a third program still active? Thank you.

[Operator:]

Our next question is from the line of Mike Ulz with Morgan Stanley, please proceed with your question.

[Mike Ulz:]

Hey, guys, thanks for taking the question. Just with respect to GAN, maybe you can just give us an update on your current thinking on the path forward there in the U.S. and in the past, you'd mentioned analytic comparablity as one of the potential scenarios there. And I'm just curious if you've done that analysis yet, or are you waiting to get feedback from the FDA before you move forward with that? Thanks.

[Operator:]

Our next question is coming from the line of Jack Allen with Baird, please proceed with your question.

[Jack Allen:]

All right. Thank you so much for taking my questions and congratulations on all progress. I guess the first one I wanted to stick in GAN and talk about TSHA-120. Maybe you can provide a little bit more context around the dating factors surrounding getting regulatory clarity here. Do you have a meeting on the calendar with FDA and any comments around when you may have clarity around the timeline in greater detail than mid-2022? And then I was just curious how the genetic testing program is going as well. Any comments you can make around early findings from that and if you would consider presenting that data I think would be quite interesting to see a little bit more insight into epidemiology of GAN as well.

[Operator:]

Our next question is coming from the line of Kevin DeGeeter with Oppenheimer.

[Kevin DeGeeter:]

Okay. Great. Thanks for taking our questions. Maybe two-part question with regard to manufacturing. Can you provide an update as to whether this strategic refocusing has any impact on the build-out of in-house manufacturing capacity and then within the cash runway assumption, how should we think about CapEx and investment manufacturing?

[Kevin DeGeeter:]

Yeah, within the cash runway guidance, how should we think about maybe cumulative CapEx or some other metrics across that time frame?

[Kevin DeGeeter:]

Thank you.

[Operator:]

Our next question is on the line of Gil Blum with Needham and Company.

[Gil Blum:]

Hello, everyone, can you hear me?

[Gil Blum:]

Okay. Maybe just kind of a general question about Rett here. So because it's a relatively larger indication, would you also expect the studies to be larger or more expensive to that account? Thank you.

[Operator:]

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

[Laura Chico:]

Hey, good morning, guys. Thanks very much for taking the question. I guess I wanted to circle back on the cash runway and with the changes. I just wanted to clarify how long the cash runway was extended and -- as it relates to the GAN program. I just want to understand the best case scenario you have around 120 and what are the options there. There are a -- but I guess, how would cash runway change if we had to go through extreme scenario where there was an additional study requested. Thanks very much.

[Operator:]

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

[Yun Zhong:]

Hi. Good morning. Thank you very much for taking the questions. So on the Rett syndrome, I assume it's a dose-finding study, so I was curious, how are you going to, or what kind of a markers will allow you to decide that you are getting close to the optimal dose? And also on the efficacy readout, any potential signal for efficacy? And I think we previously talked about this potential and EGP is one of them, and just curious, would that be included in the data readout by year-end any additional markers?

[Suyash Prasad:]

Let me make a couple of comments. The two boys in the lengthened study and adults being announced at Rett. The initial stock presented is 5E14 central VG dose. And these provisions escalate up to the 1E15 central VG. Now, I think the most important thing here, is that we have an incredibly robust pre -clinical package. It's what allowed us to have a CTA open. And we've had a lot of the regulators on some of the details. And the frequent practice behind the naval practice was designed around three studies of built-on many, many years of what the Steven Brian unit involved with. The list is both study for those perspectives of pharmacology study, which we ran in 252 mice, with well-taught mice. The 12 -- sorry, 21 hawks, and we looked at a number of different doses. A number of different age, time points of dosing mice under the whole spectrum of parameters, all of which translate nice with the clinical, some of the optimize measures, for example, looks to getting to these mice in Portland, perform active mobile visits for breathing on a whole, such of other assessments. On that particular study, we're able to elucidate a minimally impacted dose. And then, on top of that, we also ran off toxicology studies that they will wrap and pains. The important data was a post the end of fee base as upon distribution data. And importantly, we found with an elevated dose, all foam outsell the clinical stocking. Guys, we actually have certainly played results and toxicology with no adverse findings. And we have very high lots of DNA show good partially addition but correspondingly low levels of . The mechanistically showing that our regulations is working. We sent the learning team for the Hong Kong study and the talks toxicology study, the Nell deliverable. This event level actually hold in regard to starting dose. And honestly its soundness, it's why we maintained and you've got to when we pick thing non-device, share any appreciable toxicity, and we expect both to be efficacious. That's how we select the base. In terms of actual measurements with, You do know, of course, that there are no official, well-known, well understood biomarkers in or in CSF. We are looking at the biomarkers. We are looking at EEG as a potential biomarker as well and the whole the RSP, CGI, the , as well as measures such as brain stem function, respiration, we'll get seizure frequency. How many seizures gotten previously, what triggers them? So, we'll really be guiding our dose selection on the of a safety signal and just in general progress with clinical perspective, on our side, EEG will be used in the biomarkers. We're not hanging any decisions around the biomarkers that's not well understood yet.

[Operator:]

Our next question comes from the line of Silvan Tuerkcan with JMP Securities. to your question.

[Silvan Tuerkcan:]

Good morning and congrats on all the progress. I just had two quick questions, please. Could you run me maybe in more granularity through your GAN base case in terms of getting this into commercial material into handful of patients, how much will be hand full and when could this start whether it makes sense to start right now or do you need to wait for your validation run in the third quarter to how much time to filing? And then my second quick question would be on the CLN7 program. Now we're going ahead with a first Gene construct. Do you think that's good enough for it or you just want to get some clinical experience no matter what this program? And thank you for taking my questions.

[Operator:]

Our next question is from the line of Kristen Kluska with Cantor, please proceed with your question.

[Rick Krause:]

Good morning. This is Rick on for Kristen. Thank you for taking our question. In terms of the prioritize programs announced today, could you please talk a little bit about the potential for grants or other non - dilutive funding opportunities around these implications. For example, we understand that federal funding bill was recently passed supporting funding for Rett syndrome research. Thank you.

[Operator:]

Thank you. Our next question is from the line of Eun Yang with Jefferies, please proceed with your question.

[Eun Yang:]

Thank you for taking my question. And so I have a question on GAN. So for the -- toward the end of last year, you mentioned that -- I think the -- you're meeting with the ex-regulatory -- ex-U.S. regulatory agencies scheduled in January. So have you met with them? I know you are not going to provide an update on till later this year, but want to -- just wanted to check if you have a met with them? And also in the U.S., you talked about 3 scenarios for some time. It sounds like option 2 could have been a likely option when you meet with the FDA. Before it is option 2, what would it be the timing for filing? I think a in the past, you mentioned them around me to 2023. So want to get your updated view on that. And lastly, RA, you mentioned that your cash runway has been increased the by one quarter. So should we really think about the reduction in work force by 35% leave to one quarter extension in the cash runway? Thank you.

[Operator:]

Thank you. Our next question is from the line of Sami Corwin with William Blair.

[Sami Corwin:]

Hey guys, thanks for taking my question. For the Rett study, will there be different outcome measures for patients depending on their age or disease stage? And then, can we expect any data this year from these CLN1 or CLN7 clinical trials? Thanks.

[Sami Corwin:]

Will there be different outcome measures for patients in the Rett trial depending on their disease stage?

[Suyash Prasad:]

Yes. In general. Yes and no. We're going to be looking at similar work buckets of measurements, regardless of . We'll be looking at specific that RSP do, such as the meds behavior assessment, practice scale. We'll be looking at certain seizure measurements, EEGs, for example, and . We'll be looking for assessments that restrict the stress index, sleep apnea, etc. Communication assessments, the assessments, plus a whole host of different biomarkers, which

[Operator:]

Thank you. Our next question is from the line of David Hoang with SMBC.

[David Hoang:]

Hey, thanks for providing the update and taking my questions. So I just had a few -- again, going back to the base case for GAN and the regulatory path there, do you have any sense about how many additional patients FDA might ask you to dose? And then in terms of the follow-up on those patients, do you know who received the commercial grade material. What do you exactly need to report? Is it just safety and PK data or do you need to follow them and get some efficacy data as well?

[Operator:]

Please, standby. We'll resume with your answer in a moment, Mr. Juan. Our speakers here. You may continue with your answer. It was with Mr. Juan. Please stand by, we will resume our question-and-answer session momentarily. Thank you. Please stand by everyone, our question-and-answer session will resume momentarily, thank you. Ladies and gentlemen thank you're standing by, we will resume our question-and-answer session momentarily, please remain on the line. Thank you.

[Operator:]

We can hear you now. Please continue.

[Operator:]

I can hear you. You can be heard into the conference again now, where we still have Mr. Hong on the line with this first question.

[Operator:]

Ladies and gentlemen, please stand by while we switch speakers ' lines. Speakers, please continue with your second line.

[David Hoang:]

Hi, guys.

[Operator:]

Please go ahead, you're on your second line. I'm going to disconnect. I'm hearing feedback on the another line. May I disconnect at this time?

[Operator:]

Thank you. Please standby while we resume with the line of Sami Corwin. Sami, please go ahead.

[Sami Corwin:]

Hey guys. Yeah. I think you were just going to answer my question on, if you can expect any data from CLN1 or CLN7.

[Operator:]

Thank you our final question comes from the line of Yanan Zhu with Wells Fargo, please proceed with your question.

[Yanan Zhu:]

Thanks for taking my question and congrats on the initiation for the Rett syndrome program can have a trial. So my first -- my question is on the GAN programs data because I think RA you mentioned about H-matched control. I think so far the MFM32 data you presented is mainly the overall natural history control cohort. So I was wondering what does the H-matched controls look like? Because I think you mentioned you have enough patient data there to do the specific age match. And also it that part of the conversation or package with your . Thank you.

[Operator:]

Thank you. At this time, we've reached the end of the question-and-answer session and I'll now turn the call over to for closing remarks.

[Operator:]

Thank you, everyone who joined us today. This will conclude today's conference call and webcast. You may now disconnect your lines this time. We thank you for your participation.