Good afternoon, and welcome to the REGENXBIO First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr.

Patrick Christmas, Chief Legal Officer of REGENXBIO. You may begin..

Good afternoon, and thank you for joining us. With us today are Ken Mills, REGENXBIO’s President and Chief Executive Officer; and Dr. Steve Pakola, our Chief Medical Officer. Earlier this afternoon, REGENXBIO released financial and operating results for the first quarter ended March 31, 2020.

The press release reporting our financial results is available on our website at www.regenxbio.com. Today’s conference call will include forward-looking statements regarding our financial outlook in addition to regulatory and product development plans.

These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted, and can be identified by words such as expect, plan, will, may, anticipate, believe, should, intend and other words of similar meaning.

Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties.

These risks are described in the Risk Factors and the Management’s Discussion and Analysis sections of REGENXBIO’s annual report on Form 10-K for the full year ended December 31, 2020, and comparable risk factors sections of REGENXBIO’s quarterly report on Form 10-Q, which on file with the Securities and Exchange Commission and available on the SEC’s website.

Any information we provide on this conference call is provided only as of the date of this call, May 5, 2021. And we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events or otherwise. Please be advised that today’s call is being recorded and webcast.

In addition, any unaudited or pro forma financial information that may be provided is preliminary and does not purport to project financial positions or operating results of the Company. Actual results may differ materially. I would now like to turn the call over to Ken Mills..

Thank you, Patrick. Good afternoon, everyone, and thanks for joining us. I hope that everyone is continuing to stay safe and healthy. On today’s call, Steve and I will review our recent progress, advancing and expanding our internal pipeline based on our proprietary NAV Technology, discuss future milestones. And Vit is unable to join us today.

So, I will provide an update of our financial results for the first quarter of 2021. At the end of the call, we’ll open the line for questions. To begin, I want to express how encouraged I am by the dedication of our team and what they’ve shown in the progress we’ve made for our pipeline of AAV gene therapies for patients.

In the first quarter of this year, we’ve achieved quite a few milestones. We’ve initiated our first pivotal trial ATMOSPHERE to evaluate RGX-314, a one-time gene therapy for the treatment of wet AMD, and we look forward to moving towards the potential BLA filing in 2024.

We’re also evaluating the suprachoroidal delivery of RGX-314 using the SCS Microinjector, a targeted in-office approach. And we have completed dosing in our second cohort of our ongoing Phase 2 AAVIATE trial for the treatment of wet AMD. Today, we also announced that we have expanded the AAVIATE trial to include a third cohort.

And Steve will walk through further details about that in just a moment. Our team has also made great strides on our rare genetic disease programs. We’re pleased with the continued development and advancement of our RGX-121 clinical program for the treatment of MPS.

We recently provided an update at the World Symposium for our ongoing Phase 1/2 trial of RGX-121 in patients up to five years old, and look forward to providing additional data from this trial in 2021, including next week at the ASGCT.

We also announced today that we dosed the first patient in a Phase 1/2 trial in older patients with MPS II where we hope to gain additional insight into the potential treatment effects of RGX-121. We recently completed enrollment in the first cohort of our Phase 1/2 trial of RGX-111 for the treatment of MPS I.

And our team has also been working diligently towards an expected IND submission of RGX-202 for the treatment of Duchenne Muscular Dystrophy in mid-2021. Here at REGENXBIO, we continue to believe in the promise of our NAV Technology and remain committed to developing gene therapies that improve treatment options for people with serious diseases.

I’m grateful for the relationships we’ve forged with physicians, patients, patient advocates, and we’re dedicated to supporting them in many other ways as well.

We’ve participated recently in several events sponsored for instance by the National MPS Society, including the virtual Race for a Cure this past weekend; and next week, we’ll join their annual celebration of MPS Awareness Day. We look forward to connecting with friends and colleagues to raise awareness for these important diseases.

Our recent financial transactions, including the January, 2021 follow-on common stock offering provide us with necessary resources to continue to advance our lead programs and research pipeline. And lastly, just to summarize, this week, we’ve begun the process to move into our new corporate headquarters. A lot going on so far in 2021.

And with that, I’ll turn the call over to Steve..

Thanks, Ken. Our RGX-314 development program for the treatment of wet AMD aims to evaluate the one-time gene therapy across multiple settings of care with the goal of providing access and benefit to as many patients as possible. I’ll begin today with an update on our pivotal program.

As previously announced, our pivotal program is expected to include two randomized well-controlled clinical trials to evaluate the efficacy and safety of RGX-314 and enroll approximately 700 patients in total, and is expected to support a potential BLA filing in 2024. We are enrolling patients in the first planned pivotal trial known as ATMOSPHERE.

ATMOSPHERE is a randomized well-controlled trial designed to evaluate the efficacy and safety of our RGX-314 compared to repeated ranibizumab intraocular injection, a standard treatment option for patients with wet AMD.

The trial is expected to enroll approximately 300 patients, and the primary endpoint is non-inferiority to ranibizumab, based on change from baseline in Best Corrected Visual Acuity at one year. Patients in this trial do not receive any prophylactic steroids beyond what is normally administered after routine vitrectomy.

The second pivotal trial’s expected to be similar in design to ATMOSPHERE, and we plan to initiate the trial in the second half of 2021. We have initiated the pivotal program using cGMP material produced from our existing manufacturing process.

And we plan to incorporate our scalable suspension cell culture manufacturing process to support future commercialization, upon completion of a bridging study, which is now active. This open label study will enroll approximately 60 patients to evaluate two manufacturing process formulations of RGX-314.

The primary endpoint of the trial is RGX-314 protein concentration in the aqueous humor at six months. We are also evaluating the safety and efficacy of RGX-314 when delivered suprachoroidaly in our ongoing phase to AAVIATE trial for the treatment of wet AMD.

We plan to report interim data from the first cohort of patients in the third quarter of 2021. Today, we announced that we have completed dosing of patients in cohort 2 and look forward to reporting interim data from this cohort in the second half of this year.

As Ken mentioned, we also announced today that we have expanded the AAVIATE trial into a third cohort of patients who are positive for AAVIATE neutralizing antibodies, or NAbs. 20 patients will be dosed in cohort 3 with 5e11 genome copies per eye of RGX-314. The same dose evaluated in cohort 2, delivered as a single injection.

As with previous cohorts, patients in cohort 3 will not receive prophylactic immune suppressive corticosteroid therapy before or after administration of our RGX-314.

This cohort of patients may provide us additional information about the effect of RGX-314 in NAb positive patients, potentially broadening the patient population that could be treated with this in-office delivery approach. Moving on to ALTITUDE, our Phase 2 trial to evaluate RGX-314 suprachoroidal delivery in patients with diabetic retinopathy.

This trial continues to enroll patients in the first cohort, and we are on track to report additional data from this trial in 2021. In our rare disease portfolio, we remain committed to bringing potential one time gene therapies to patients with rare genetic disease for which there is a significant unmet medical need.

Earlier this year, we announced the development of RGX-202, a one-time gene therapy for the treatment of Duchenne. We are working towards an IND filing for RGX-202, which we expect to submit in mid-2021.

We recently announced that the first patient had been dosed in cohort three of our ongoing Phase 1/2 trial of RGX-121 in patients with MPS II, up to age five years.

As reported at the World Symposium conference in February, we have observed encouraging interim data from the first two cohorts, which includes signals of I2S enzyme activity in the CNS, continued neurocognitive development and evidence of I2S enzyme activity in the plasma and urine following of RGX-121 administration.

We will be providing further program updates later this year, including additional data from these cohorts at ASGCT next week. We’re also pleased to announce that the first patient has been dosed in a Phase 1/2 trial of RGX-121 for the treatment of pediatric patients with MPS II over the age of five years old.

Expanding the RGX-121 development program may provide meaningful insights into the potential treatment effects of RGX-121 in more patients. Turning to our Phase 1/2 trial of RGX-111 for the treatment of MPS I. We recently completed dosing of patients in cohort 1.

RGX-111 is our second product candidate for the treatment of a rare neurodegenerative disease to be dosed in patients. We believe one time treatment with RGX-111 may provide sustained IDUA enzyme for patients, potentially preventing the progression of disease. And we look forward to providing additional program updates in 2021.

We also recently submitted an IND for the intracisternal delivery of RGX-181 for the treatment of CLN2 disease, after which the FDA notified us in a letter that our proposed trial has been placed on clinical hold and the agency requested more information to support the initial dose selection and certain study drug administration procedures.

Our team is currently evaluating the requests from the FDA, and we plan to provide an update on the program in the second half of 2021.

Based on separate discussions with the FDA around the RGX-381 program for the treatment of ocular manifestations of CLN2 and the update from the RGX-181 program, we now expect to provide an update on plans for the RGX-381 program in the second half of 2021. With that, I turn the call back over to Ken..

Thanks for those good updates, Steve. As I mentioned at the beginning of the call, we’re excited that we’ve started to move into our new headquarters here in Rockville, Maryland.

And as we populate the offices and labs, we’ll also be completing the build-out of the cGMP suites in the new building, which is expected to allow for production of NAV vectors at scales of up to 2,000 liters using our platform suspension cell culture process.

While the construction of this new building has been exciting to watch so far, we’re keenly focused on getting the work in the new facility. The goal is strategically integrating our in-house production capabilities with our external suppliers to meet the clinical and commercial supply needs across all of our programs.

Outside of REGENXBIO’s walls, we’ve also been pleased to see the clinical advancement of some of our partner programs utilizing our proprietary NAV Technology Platform. Ultragenyx recently announced the IND clearance of their product candidate for the treatment Wilson disease.

Astellas has announced that the first patient was dosed in their new trial for patients with late-onset Pompe disease. We’re encouraged by these examples of advancements by our partners in the AAV gene therapy space. Now, I will turn to the review of our financials.

REGENXBIO ended the quarter on March 31, 2021 with cash, cash equivalents and marketable securities totaling $656.5 million compared to $522.5 million as of December 31, 2020. The increase was primarily attributable to $216.1 million of aggregate net proceeds received from our follow-on public offering of common stock completed in January 2021.

The increase was partially offset by net cash used in operating activities of $41.1 million, cash used to purchase property and equipment of $31 million, and Zolgensma royalties paid to Healthcare Royalty Management of $9.5 million.

Revenues were $18.9 million for the three months ended March 31, 2021 compared to $17.6 million for the same period in 202. This increase was primarily attributable to Zolgensma royalty revenues, which has increased by $8.3 million, and was partially offset by a decrease in other license revenues.

Research and development expenses were $39.7 million for the three months ended March 31, 2021 compared to $37 million for the same period in 2020. The increase was primarily attributable to personnel costs, as a result of increased headcount, laboratory and facilities costs and clinical trials expenses for our lead product candidates.

General and administrative expenses were $17.8 million for the three months ended March 31, 2021 compared to $18.4 million for the same period in 2020. The increase was primarily attributable to personnel costs as a result of increased headcount and professional fees for advisory and other services.

Net loss was $50.1 million or $1.20 basic and diluted net loss per share for the three months of March 31, 2021 compared to a net loss of $40 million or $1.08 basic and diluted net loss per share for the same period in 2020. As of March 31, 2021, we had approximately 42.5 million common shares outstanding.

Based on our current operating plan, we expect the balance in cash, cash equivalents and marketable securities of $656.5 million as of March 31, 2021 to fund operations, including the completion of our internal manufacturing capabilities and clinical advancement of our product candidates into the second half 2023.

The focus on our internal pipeline and encouraging progress is a testament to the hard work, experience and commitment of our entire team.

We also look forward to sharing more about our progress using our NAV Technology next week at the American Society of Cell and Gene Therapy annual meeting -- Gene and Cell Therapy annual meeting, one of those meetings.

We will be sharing multiple scientific posters and presentations, showcasing our extensive knowledge across our pipeline and broader AAV characterization.

Given the breadth of our pipeline of gene therapy candidates, the advancement of our first pivotal gene therapy program, and our strong financial position, we believe we’re well-positioned to realize potential curative gene therapies for many patients in need.

We look forward to keeping all of you updated on our programs throughout the remainder of 2021. And at this time, operator, we are ready to open the call for questions..

[Operator instructions] Your first question comes from the line of Geoff Meacham with Bank of America..

Hey, guys. This is Alec on for Geoff. Thanks for taking our questions, and congrats on the progress so far this year. So, my first question is on 314.

Do you have a sense from your physician interactions, what an acceptable frequency of rescue VEGF injections would be for clinical adoption? I mean, taking into account that they view -- I think it’s three months dosing and first mab is up to four months. And I know it may be a bit premature considering 314 is just starting pivotal study.

But, I’d also be interested to hear your thoughts on how reimbursement discussions for gene therapies in wet AMD are evolving and any color on how you think payers will approach this if indeed, rescue injections are still required, even in a subset of patients? And then, I have a follow?.

Hi, Alec. Thanks for the question, Steve here. Yes, we, of course, have our clinical investigators within our trials, as well as our thought leaders in this space and other redness specialists that we’ve kept close contact with over the years.

You mentioned other products have come along and incrementally increased the durability of anti-VEGF treatment. There’s still clearly a big unmet need that exists.

And what we hear from investigators is and also other retina specialists, is if you can have a meaningful reduction in the treatment burden, so, you don’t have to actually completely obviate the need for any injections. Though, obviously, we’ve seen that in a reasonable percentage of our patients.

So really, what we’re targeting, based on discussion with the retina community is, 50% reduction in anti-VEGF frequency, as well as potentially having 50% of patients needing absolutely no retreatment.

That is a real homerun for the retina community, both now and also compared to the incremental advancements that are occurring with some of the other treatments that are out there..

Yes, Alec. And I think the second part of your question really relates to that one of those variables being sort of injection burden and the other being, obviously, maintenance of vision and durability overall.

We’ve been really fortunate after we updated on three-year data from cohort 3 and 1.5-year data with cohorts 4 or cohorts 5 at the beginning of the year, and be able to integrate that into discussions that we are having as we sort of start our pre-commercial and commercial planning exercise.

And I think what I can say is right now, I think people are encouraged by what they’re seeing. They’re continuing to have a productive dialogue with us.

And I think there’s a lot of focus on, not only the benefit that we bring to patients in terms of offsetting the current burden of treatments, but also looking at the reality of the treatment in, not just the label paradigm, but certainly the real world use paradigm.

And that’s where a one-time treatment of gene therapy really differentiates itself in terms of value, particularly with the data that we’ve seen in our cohort 3 out to three years with patients, who’ve never received an injection. Thanks for the question..

Your next question comes from the line of Gena Wang with Barclays..

Thank you for taking my questions. Quite a lot of a progress. I have a few questions regarding also the 314, the AAVIATE study. So, sine you already completed enrollment for cohort 2, did you see any information from patients in cohort 2? Is the safety profile similar to cohort 1? And my second question is regarding the cohort 3.

Can you remind us that antibody tighter cutoff for cohort 1 and 2? And what is the antibody titer -- threshold for cohort 3? And then regarding the dose, why single injection of 5e11? Is that because of the protein level or safety or convenience at administration?.

Yes. Hi, Gena. So, we’ll take these one by one. So, on the inflammation question, so at the beginning of this year, we had updated based on the data that we had of C1, no inflammation, and also guided at the very same time that the next interim update that we would give would be Q3.

And the reason for that is that, we wanted to have a full six months robust amount of data on both, safety and efficacy. So, we’re not changing that guidance. But, what we can say is, we did complete cohort 2.

And based on where we’re at now, we were able to advance and expand the AAVIATE study to include a third cohort with inclusion of patients -- who are positive for NAbs AAVIATE. So, we feel good about the position we’re in. Your question on a single injection, why single injection.

We have the ability with a higher concentration to be able to give a single injection. So, in our discussions with investigators and others, not surprisingly, if you have a choice between a single injection or two injections, one injection would be preferred from a convenience standpoint.

And again, based on where we’ve gone, we are very comfortable to be able to go with that higher concentration and a single injection in that cohort. The titer question, in terms of neutralizing antibodies, the reality is different assays will have different cutoffs. So, it’s somewhat arbitrary for -- if we were to give some dilution to you.

What I can say is that, we have experienced with this from our sub-retinal study, where, as you know, we don’t have to exclude patients who have high titers to neutralizing antibodies. So, in that study, you’ll recall, we actually included close to 60% of those patients actually had positive titers.

So, the threshold that we used with that assay -- and that fits with what’s in the literature. So, we basically use that same threshold for this study with this assay..

Your next question comes from the line of Gbola Amusa with Chardan..

Thanks for taking my call. Just wondering, if you had any thoughts with regards to case of hypotony, panuveitis and loss of vision from a competitor using intravitreal delivery.

I know your program’s different, but what are your thoughts on why it’s sufficiently differentiate, so the KOLs, maybe regulators are less focused on the lead across? And then, I have a follow-up..

Hi, Gbola. As with any gene therapy, and I think even more so in ocular gene therapy, every program has -- you have to look at the different variables that are relevant.

And we can only say so much about another program, but that’s a different factor vector 7 an 8, and of course, administered intravitreally in the setting of prophylactic steroids where chronic inflammation requiring ongoing or a repeat reactive steroids have been needed for beyond a year.

And that has just not been something that has been seen with other gene therapies. So, I think, the chronic nature of that inflammation is very different from what’s been seen with prior AAV2 or AAV8 gene therapy in subretinal delivery and even in intravitreal administration setting. So, we do not see read-through.

And although there’s this unfortunate SUSAR case, the reality is in the backdrop of chronic inflammation, these are the negative sequelae from chronic inflammation.

So, our view on this is the same as it’s been before of why we picked our vector, our product and what we’ve seen pre-clinically and clinically where with SR administration, RGX-314 we’ve not seen chronic inflammation and the transient inflammation has been consistent with post-vitrectomy setting.

And it was suprachoroidal delivery pre-clinically and what we’ve seen to date as well, we’re very comfortable with what we’ve seen with our particular less immunogenic vector.

And I think, importantly, this route of administration where with intravitreal, we know there’s anterior clearance of the vector and the potential to have transduction anteriorlly, and then, now with this particular program, unlike others, this chronic inflammation.

So, we see this as a very unique setting compared to certainly what we’ve characterized..

Your next question comes from the line of [indiscernible].

Thanks for taking the question, guys. So, you talked a little about what you’ve seen in a previous study with literature and you’ve gone back and forth around the discussion around neutralizing antibodies.

The name might perhaps overstate their impact in this case clinically for you guys, versus the previous cohort 3? And I got a little more experience in the clinic sub-retinal analysis suprachoroidal.

What is your view on the prevalence of neutralizing antibodies in the real world as opposed to any kind of historical literature that we’ve looked at? And how successful cohort 3 effects the opportunity set up by expanding into that population?.

One of the favorable aspects, as we know AAV8 pre-existing neutralizing antibody, high titers is less prevalent than say AAV2. So, depending on the studies you’d look at, and the thresholds, 30% to 40% of patients will be positive for AAV8 neutralizing antibodies.

We fortunately for subretinal route administration can be totally agnostic to that, both as predicted based on the immuno privileged status of the subretinal space. And we’ve actually shown that in our Phase 1/2 study where patients who did have positive NAbs did just as well from a safety and efficacy standpoint in that trial.

So, there, it’s quite simple. The unknown is with suprachoroidal delivery. Will that 30% to 40% of patients that are positive or have higher NAb titers, will that have any impact on the safety or efficacy of RGX-314 via that route of administration.

But, that’s why we decided to go stepwise with our suprachoroidal delivery program, first looking in NAb negative patients in cohort 1 and 2, and now being able to explore with the same dose GC per eye in patients who are NAb positive to really assess that question..

The next question comes from the line of Esther Rajavelu with UBS..

I just wanted to follow up on the ALTITUDE DME study. Where are you on enrollment and is it tracking to the timeline anticipated? And then, I have follow-up..

So, thanks, Esther, our ALTITUDE study is in patients with advanced diabetic retinopathy. And it’s actually in patients without DME.

And that’s intentional, because with this in-office delivery approach, the ability to treat patients with sustained anti-VEGF gives the opportunity to prevent patients from developing sight-threatening complications like DME or proliferative disease.

We have previously guided and continue to guide that we’ll have interim data by the end of the year, so in the second half of this year. So, we’re still on track..

[Operator instructions] Next question comes from the line of Matthew Harrison with Morgan Stanley..

This is Kostas on for Matthew. One question from us on 181. Could you provide some color on trial hold and did the dose selection process in this program differ from your other programs? And how do you expect that trial hold during the timelines of the two CLN2 programs? Thank you..

So, we received a clinical hold letter with comments and requests for more information regarding a dose selection for the starting doses, as well as some specific technical aspects regarding administration. You mentioned the relation to other programs.

Each program gets looked at individually in terms of the overall preclinical package and assessment of an appropriate dose. So, we’re very excited about how far we’ve advanced with intracisternal delivery of AAV9 from our 121 and 111 programs, both in terms of safety, tolerability, and also proof-of-concept in terms of durable expression.

So, that’s why we’re advancing with RGX-181. But again, each program has its own aspects. We’ll give an update in the second half of this year, so that we can evaluate the request and the comments to decide on our next steps for 181..

The next question comes from the line of Luca Issi with RBC..

Perfect. Thanks for taking the questions. This is Lisa on Luca. And congrats on all the progress made so far. I just wanted to ask about the suprachoroidal program, and you’re enrolling cohort 3 with patients with neutralizing antibodies.

Just wondering if you are concerned about inflammation at all in this patient population? And if so, do you intend to offer steroids even on a prophylactic basis or as needed for patients? And a second question, we see in your ASGCT presentations, there is a poster suggesting exploration of intravitreal delivery with your AAV library in mice and non-human primates.

Excited to see the data here in a few days. But just curious if intravitreal delivery is something you intend to start exploring aggressively for clinical development. Thank you..

Hi, Lisa. Steve here. I’ll take the first part and Ken can then address the ASGCT, rather administration question. So yes, on C3, cohort 3 of AVA, just like cohort 1 and 2, there is no prophylactic steroids either before RGX-314 treatment or after. So, we’re excited to be able to expand into that.

We do the study to see if NAb status would have an impact or not, pre-clinically, we’ve haven’t seen inflammation, but of course we have to see in humans. But again, we have no prophylactic steroids in the study.

Traditionally, people have thought of NAbs as potentially impacting efficacy because of binding up your payload to some extent and less on the safety side. But again, conservatively, we do the study to see. But again, we’re quite comfortable going in without prophylactic steroids..

Yes. Lisa, on the second part of your question about looking at different routes of administration outside of what we’re using clinically today, including intravitreal, I think, we’ve been open with the fact that, I mean, our research agenda is broad.

And we look at all the possibilities for bringing our different product candidates depending on the disease and the target tissues for pre-clinically in a robust way. We continue to group some great science.

I think, we’re going to be presenting next week about evaluation of different vector characterization, new types of vectors, and across the spectrum of route of administration.

But nothing has jumped out for us in terms of thinking any differently about how strongly we feel about subretinal being really the gold standard of approaches for targeting the retina with AAV. And that suprachoroidal was the approach that we decided was best for in-office procedure.

And that was after evaluating things like intrathecal as well as frankly, other device approaches as well for the placement of AAV in the back of the eye. So, always like to show off our good science and our scientists, but no plans to move intravitreal into the clinic anytime soon..

There are no further questions. And now, I will turn call back over to Mr. Ken Mills for any closing remarks..

Thank you, operator, and thanks everyone for joining us today. We had a good first quarter of the year, and look forward to continue to execute against our plan and our mission to progress the curative potential of AAV gene therapy for patients. So, thanks. Look for further updates, and have a great night..

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. And you may now disconnect..