I think, you know, we started over 10 years ago. We had a thesis that better vectors were important to be able to open up the full potential of gene therapy with AAV, and particularly to be able to open up the opportunity of large sustainable markets. You know, we look 10 years later, we believe we've achieved that opportunity. We have a best-in-class vector for intravitreal delivery targeting retina, a best-in-class aerosol-delivered vector, and then, you know, we believe a best-in-class IV vector for heart delivery. The platform's played out the way we had hoped, and with that, you know, we have two large market opportunities, both with 4D-150 in wet AMD and DME, and then 4D-710 in cystic fibrosis, lung disease.
Over the next 12 months, really, it's all about execution on the phase IIIs for 4D-150 and 4D-150 phase III trials in wet AMD, and then reading out the initial kind of phase III dose data from the phase I, II, cystic fibrosis program, and then interactions with FDA about to design the phase III for cystic fibrosis.
Let's start here with your ophthalmology assets. At this point, you've reported 52-week phase II. You've initiated your first phase III for wet age-related macular degeneration. What do you believe is being underappreciated by the street on this asset, or where do the debates lie with regard to a gene therapy in an ocular disease?
Yeah, I think people start with this premise with gene therapy that it has to be perfect. I think the reason that has arisen is because there have been challenges in the field with traditional, you know, standard non-evolved vectors where very high doses are required, leading to potential safety issues and high cost of goods, meaning high prices. We flipped that on its head and said with better vectors, we can get very low doses, low cost of goods. For example, in wet AMD, we think our cost of goods is on the order of $500 or so, which gives us pricing flexibility. We think that people are underappreciating the real commercial opportunity here for 4D-150 and for 4D-710 in cystic fibrosis. We think these have the potential to be multi-year, durable, safe therapies administered by routine routes of administration, and we're addressing the highest unmet needs in these populations.
What has the feedback been from physicians on the phase II data here? And based on your discussions, how are stakeholders thinking about the value of gene therapy beyond the potential to be injection-free? And you, you know, you've touched on that a little bit.
Yeah, I think the feedback from physicians has been phenomenal. You know, physicians say this is the number one thing that they want, and what their patients want is better durability. They do not ever think about the need to be injection-free. What they want to see is injection burden reduction. If we think about Vabysmo, which has had a real rapid launch, rapid market uptake, they are reducing the injection burden by about 20% versus Eylea. We are getting data where we are reducing injection burden by 80% to 90%. Given our safety profile reduction, we have had incredibly high interest from physicians to participate in phase III. We are thrilled with the way enrollment is going, and we think patients really want this.
Do you believe that tolerability and durability at this point has been de-risked?
Yeah, I, you know, we always have to be cautious. You know, you can never say, there's, you know, that you're out of the woods with safety, at any time, really. But so far, the safety's been phenomenal. You know, it's, both in wet AMD and in DME, where DME, we haven't seen any inflammation whatsoever, no front-of-the-eye issues, as has been seen with other programs. We're thrilled with the safety profile. It's critical in large markets like wet AMD and DME. You know, I think that's why the physician interest and patient interest is so high, is, is not only the efficacy but that safety profile. Yeah, as best as we could de-risk it to this point, we think we have.
Help us frame, or if you could frame, expectations for the 1.5 years -2 years, data update that's expected in the fourth quarter.
Yeah, you know, we hope to show ongoing injection burden reduction and great safety. You know, we've shown durable expression out to two years, and some patients have been followed that long in terms of the aqueous humor levels of aflibercept. We've shown ongoing stable efficacy, and we would expect that to continue. You know, by definition, the injection-free rate can only go down over time. Again, physicians and patients are thrilled. If a patient gets one dose a year, one dose every two years, they're thrilled. We would hope to be able to show that, that per unit time, consistent efficacy that is not waning, based on our data to date and based on other data in the field. You know, we would expect lifelong expression from the retina.
Yeah, I think an important nuance to add to what David just said is kind of the two populations we were looking at in that Q4 update. We had the severe population that despite 10 injections, they were coming in with 400+ CST. This is very recalcitrant, not well-controlled patients, and kind of that population, their disease waxes and wanes much more severely. That will influence the injection-free rate much more than the other population, which is a broad population, which includes patients who are better controlled coming into study and a lower anti-VEGF need, and we expect a higher injection-free rate in those patients.
Yeah, it's a really good point. You know, we when we look at the subset of patients in phase II who had been diagnosed within the last six months, there we had on the order of 70% injection-free at one year, and, you know, injection burden was over 90%. So we would, again, expect to continue to see that kind of efficacy in that population, and that's much more closely aligned with who we're treating in phase III.
What are your thoughts right now about the translation of the phase II data to the phase III data and where the risks may lie if that does not translate? Like, if you break the thesis where, you know, where are the concerns and risks, and how confident are you on the success here?
We're very confident, and we don't take that lightly. I think, you know, the program has really been, the phase II program is very broad. You know, we looked at the hardest-to-treat patients, as Julian[guess] said, plus, you know, more recently diagnosed. We've seen the spectrum of activity across that. We've seen great safety. You know, the topical steroid drops have worked very well. I think coming into this, we really understand the product and we've de-risked it as much as possible. You know, we have a phenomenally good group internally and externally that we work with to design the phase III and make sure that the criteria for disease activity, injection burden, injection, supplemental injections as needed, closely aligned with what we used in phase II, so there shouldn't be any surprises there.
But also it's set up in a way to make sure we protect BCVA as a primary endpoint in the phase III. I think if you look at the breadth of our data, the number of patients we treated coming in, the design of the phase III, and the fact that all we have to hit is non-inferiority on BCVA, visual acuity, I think it was about as de-risked as you could possibly be. Enrollment, you know, we're very excited about enrollment. We're now up over 70 sites open, so very rapid site opening, excitement about enrollment. We think we'll quite easily hit or probably beat our 15-month recruitment expectations there. We don't view enrollment as a risk. Just one final point on that, it's quite remarkable. I mean, this is a fine gene therapy study, intravitreal. I mean, think about that. You know, who thought that was possible just five years ago? Yet, enrollment's, you know, off the charts and, in front-line patients.
Yeah. What about the, I guess, when you speak to physicians, the real-world relevance of what you're measuring and the outcomes that are gonna play out from the phase III with regard to not just physicians but also payers?
Yeah, I think, highly relevant. You know, physicians essentially in the real world, they treat and extend, so they'll give upfront treatment, which we do in our phase III as well. Then they try to see how far they can extend patients before they need another dose and give them longer and longer follow-up. You know, I think our study design in terms of watching patients over time, seeing when they need supplements, if, if ever, should closely mirror what they do in the real world. I think our cutoffs for injection based on CST and BCVA are consistent with what people would do in the real world. We think it'll be very relevant for commercial, obviously proving out that durability, which has been proven by others with AAV in the retina, and we're now out to two years and we'll continue to follow. That'll be important for pricing.
Maybe speak to the commercial dynamics here. So there's been, you know, some change in this space with the entry of biosimilar Eylea, but also, you know, these longer, or less frequent injection options as, as you've noted with, with both Roche and, and even Regeneron. How do you and then emerging options with TKIs? Maybe we could just, you know, one, understand how you think of positioning in that current environment, but how you think TKIs will then come in and impact this.
Yeah, I think if you look at every survey that's been done, and, you know, the ASRS does a survey every year on patient interest and needs, durability and extending the treatment duration is by far and away the number one desire for patients and physicians. If you ask the question, which agent out there has the potential to have the longest duration, I don't think that's the debate. It's gene therapy with AAV, full stop. That's not controversial. So will TKIs have a role? Probably, maybe in better control of patients who don't have as severe disease, and maybe they can extend the four- to six-months, which is similar to Vabysmo. I think the battle there will be Vabysmo versus high-dose Eylea versus TKIs. And, you know, there's probably room enough for everybody.
I don't think there's any question but that the only game in town when it comes to multi-year durability, a foundational background suppression of your VEGF levels and the potential for a functional cure, that's uniquely gene therapy. I think when you look at gene therapy, there's the REGENXBIO subretinal program has promise, but again, subretinal is really not directly competitive with us with the intravitreal. We think we're kind of the best in class, longest-acting opportunity out there.
Any comments you wanna make on, on the pricing aspect? Because you've talked about how this is a case where you can be competitive, you know, based on, just your, your diligence and, and the overall cost constructs here.
Yeah, so we have a really outstanding Chief Commercial Officer, Chris Simms, who joined us last year, and, you know, he ran the Beovu launch, the Eylea launch, so he's very experienced. You know, I think the number one thing he loves about our situation is the pricing flexibility, where given a cost of goods that's on the order of $500, that means we can titrate that price to benefit the system, patients, and ultimately our shareholders. People usually, as you know, think about some multiple of the annual cost of standard of care might be the way that gene therapy's priced, and, you know, we would assume the same. We have a very healthy margin regardless of where we price it.
Great. What is your strategy at this point for diabetic macular edema? Just noting that the FDA's allowing you to proceed directly into a single phase III study. Help us understand when such a trial could be initiated, and then is there, you know, is this the area where you could think of partnering?
Yeah, I don't think we would partner out 4D-150, you know, for, for different indications. You know, we do expect to eventually have an ex-U.S. partnership or two, but really retain U.S. rights. I do think, you know, to our knowledge, we believe we're the only product that has not only RMAT and PRIME for wet AMD in the U.S. and Europe, but also RMAT for DME as well in the U.S. And that single, single patient study with, you know, roughly 300-350 patients, is a great opportunity for us. It's not currently in our cash runway. You know, we think it's important to fully fund both wet AMD trials. Right now, the conservative readout is second half of 2027. We hope to beat that with cash in 2028. That does not include funding for the DME study.
At some point, you know, we're gonna look at alternative financing opportunities or BD opportunities to try to fund the DME. Because I do think we're, we're that's a unique opportunity for us with the single trial, and again, there's not much in the way of competition there right now.
Help us understand the benchmark for the 32-week phase II data that we're gonna see in the third quarter.
For, DME?
For DME.
Yeah, so do you wanna kinda speak to what we can expect with that data?
Yeah, sure. This, as a reminder, Spectra was a kind of really early trial. It was essentially a phase I safety trial and kind of efficacy finding where we're looking for a dose response between the 3e10 dose and the 1e10 dose. We also wanna continue to follow for durability. The primary endpoint is at 52 weeks. We shared 32-week data early in the year where we saw, you know, after the three loading doses we gave the patients, they were able to see an 8.4 letter gain and kind of maintain that through that 32-week period, after gene therapy. CST was also dramatically improved, and we maintained that with kind of a very low injection burden, and several patients were injection-free. It's small numbers.
We have nine patients at the 3e10 dose, 11 patients at the 1e10 dose, and we wanna continue to see that dose response over time, continue to see the maintenance of vision, the maintenance of anatomy, and without an increase in the rate of injections. I think if we can see that, that's kind of just, again, proving that 4D-150 as a backbone therapy, would be beneficial to these DME patients who are not very compliant on therapy today.
Got it. Just moving over to the pulmonology franchise here. In cystic fibrosis, could you walk us through the regulatory and clinical updates that you've provided and the next steps for this program?
Sure. The phase I study, aerosol delivery, the design of the study is to look at biopsies at one to two months, and brushing. We get both large airway and small airway CFTR expression from the transgene. We are also looking at safety, FEV1 over time, lung clearance index over time in the more recently treated patients, and then quality of life. In this study today, what we've shown is a beautiful dose response in terms of, as we come down on dose, we see more physiologic range of expression early on. We overshot actually, which again, no one ever thought that was possible in gene therapy, especially in the lung where no one had shown expression. We actually overexpressed and actually were getting into cells in the interstitium that we didn't think we needed to be in.
We were actually able to decrease the dose, decrease the cost of goods, give ourselves an even larger safety window. And then anecdotally, we've seen as we dropped the dose and got into more sick patients who have a lower baseline FEV1, we've been able to show some anecdotal improvements in that. That's encouraging. We're also collecting data on LCI, which is called lung clearance index, more reproducible than FEV1, and also quality of life. We've seen anecdotal evidence of benefit. We're now in a range where we think we're at the right dose range. We're treating a total of six patients there, and then we can expand and treat even additional patients at that dose level, sort of a phase II dose, prior to having conversations with FDA about phase III. We're excited about where it's going. We think we've honed in on the right patients, the right dose range, and the right endpoint.
We will see interim data in the second half. Which of these measures could we expect to, you know, have further elucidation on? How are you thinking about establishing the relationship of protein expression to functional and quality of life benefit and durability?
All of the above. Yeah, absolutely. We will make those correlations. I think, as I said, this is sort of a unique problem in the 4D that our vectors are so efficient that we oftentimes find that we actually have to decrease the dose or really not require large dose escalation. Here, as we've dropped the dose, we're still overexpressing CFTR compared to normal, but more in a physiologic range. As we do that, we think we're gonna see even better clinical outcomes. That's something we'll be sharing. To date, we've shown highly reproducible results on these biopsies and brushings. It's remarkable, really, how consistent it's been. As you drop the dose, you just see a proportional drop in that protein expression. Again, we think we're now at the right dose level to really maximize benefit for patients.
Is there an ability for you to go back to the FDA now, given you've got a new head of CBER, and see if there's some flexibility here with this pathway versus what was offered prior, and whether you could have an accelerated approval pathway or maybe a non-placebo control study? I guess, how are you thinking about this?
Yes, all the above again. We have had those discussions with FDA. We have a great relationship there. We're getting pretty frequent interactions as the data evolve. Obviously, we wanna come back to them with even more follow-up from this low dose level later this year. Initial discussions on that possibility have been very productive. Certainly, if you look at other programs in rare diseases with no available therapy, which is the case here, you know, we're focusing on the patients with no available therapies. Single arm studies have certainly been allowed. Despite the initial concerns about changes at the FDA, we haven't seen a material change, at least so far, in terms of their messaging around rare diseases and potential for accelerated approval or even full approval based on single arm studies. Anything to add there Jullian?
No, I think you covered it all. I think, just the one thing in terms of the data release in Q4, in second half, we'll also have some additional biopsies from longer-term follow-up. That kind of paints the durability picture of what lung gene therapy can achieve.
Yeah, that's a very good point. You know, we coming into it, we knew, you know, retina is stable, which should be lifelong expression. It was really unknown in the lung what that turnover rate was gonna be. Even experts, our partners at the C F Foundation, really had no idea. In mice it looks like it's a year and a half, so we thought maybe in humans it's two to three years. The data we're now getting on those late biopsies, I think, really landmark data for lung therapeutics generally.
You've also demonstrated your platform has, you know, broad utility, including in cardiology. You have prioritized at this point these two indications, the two diseases we talked about. How are you thinking of capturing platform value while balancing spend? I know it's a difficult question, but [crosstalk].
No, I mean, it's, that's why we, it's what we get paid to do. I think the platform has borne out incredibly well. You know, our team not only has discovered great vectors, but our translational development's been phenomenal. You know, we have six products with open INDs, and, you know, it's been really an IND engine. Once you have one of these vectors, you can very efficiently build out a whole portfolio of products in modular fashion just by swapping in and out different transgenes. FDA's been very open to more accelerated development path, pathways when you have multiple products using the same vector, same manufacturing techniques. Long term, we think there's a real opportunity for a whole lung franchise, a broad retina franchise, and others.
We just have to be disciplined and focused now, given the market conditions. Fortunately, we're very well funded, but we have to stay focused on our lead products. Over time, for sure, there's a potential there. Certainly for products that we can't develop that still have promise, partnership is a logical thing to explore.
How would you think about partnerships in that context? I mean, is it the thought here that you keep ophthalmology and you look to partner on other aspects?
Yeah, I think we’d certainly like to keep large market ophthalmology in the U.S. as much as possible, but we’d be open to ex-U.S. And then, in lung, we think we really have a potential for a major franchise and portfolio there as well. Again, I think we’d probably think about it in the same way as maybe partner ex-U.S., but keep U.S. for ourselves.
Maybe remind us where you stand from a balance sheet standpoint with regard to cash with regard to funding these programs.
Yeah, you wanna speak to that, Jullian?
Yeah, sure. So, we ended Q1 with $458 million of cash, so a very healthy balance sheet. That's primarily allocated to kind of run the phase three trials for wet AMD. So we're like fully funded through the primary readout in second half of 2027. Runway stretches into 2028. We hope to kind of bring those timelines forward, but as of now, kind of second half 2027 is the phase three guidance. In addition to that, there's kind of early development for DME and kind of CF, continue to follow the patients and take that into kind of phase two. But we don't have phase three funded yet for DME or for CF. So, you know, base case is, we're gonna kind of continue to work on this wet AMD program.
If we can find these alternative means of financing, BD or, you know, other alternative non-equity vehicles at this time, we can then consider opening up those other kind of projects.
Got it. The, the Directed Evolution platform has allowed you to create these vectors, right, that have really worked with your tissue targets here. And how is, how are optimization efforts playing out here? There have to have been since you went public, you know, or even prior to that, just learnings that have played out and could enable you to kind of create, you know, maybe potentially better drugs on the forward. So how are you bringing that know-how into your platform?
There have been extensive learnings. You know, we've been doing this for more than 10 years. You know, we are the first to start a company around this. There are now a number of, you know, companies trying to do this. If you look at, you know, kind of delivering on products and getting products in the clinic, again, six open INDs with products from our platform, I don't think there's another company out there that has a single one from their platform. I think we still are the market leaders there, you know, based on the work of our phenomenal team. I'd say in terms of the learnings, there's a lot of learnings around, there's not only a huge patent portfolio around the vectors we've discovered today, but there's a lot of learnings around how to construct the library.
We use machine learning now to kind of predict which vectors are gonna package well, which is obviously important for cost of goods. There are learnings around designing and building your libraries that go into the selections. There is a lot of learnings that we have had around identifying sources of bias when it comes to isolating and pulling out the sequences from different vectors over time. I think every year we have been doing this, we have been getting better and better, reducing areas of bias and increasing the diversity of our library and increasing the robustness of the results.
Great. Is there anything else that you wanna touch on here with regard to the overall platform or the data sets that we're gonna see coming up?
I just think that, just I think probably the biggest disconnect we see is this idea that gene therapies are all the same. They're not. And to, you know, while there have been difficulties and even tragic deaths on IV programs for very severe, you know, childhood fatal diseases, what we're doing is incredibly different. We're doing large markets, local application, intravitreal, local application in the lung. We get away from the high cost of goods. We get away from the safety issues, and we get away from the commercialization questions. We hope over time people will come to realize that our model, our technology, our opportunities are very, very different from some of these other programs in gene therapy.
Great. With that, thank you so much.
Thanks for having us.
Thanks for having us.
All right.