Good morning. I'm Geulah Livshits, a biotech analyst at Chardan, and it's my pleasure to introduce Dr. William Chou, President and CEO of Passage Bio. Thank you for joining us today.
Thanks for having me.
Could you maybe start with a high-level overview of Passage's evolution and current strategy?
Sure. So Passage Bio started out as a gene therapy company focused on multiple neurodegenerative diseases, adult and pediatric. We also had a very heavy R&D investment that we did alongside the gene therapy program at Penn. So we've shifted our focus to our most promising asset for adult neurodegenerative diseases. That's PBFT02, which raises progranulin. We have also exited that relationship with the University of Pennsylvania, as Dr. Wilson, who spoke yesterday, has spun out his own company. We still do have a preclinical relationship with Jim's new company, Gemma Bio, but we no longer have a basic research collaboration with the University of Pennsylvania. So we are laser focused on clinical execution of our main program in FTD with the GRN mutation.
Mm-hmm. So let's talk more about the FTD program and the disease itself. Can you talk about the disease and the asset that you're developing there?
Sure. So patients with frontotemporal dementia with the GRN mutation are haploinsufficient in one gene, the GRN gene, and this, the GRN gene encodes progranulin, which is a protein that is necessary for proper lysosomal function. When you have low levels of progranulin, you end up getting TDP-43 pathology in neurons and then neurodegeneration. And so our product is an AAV. It is injected directly to the cisterna magna in a procedure that is done by an interventional radiologist that takes about 45 minutes. And this AAV encodes for progranulin.
Mm-hmm. Got it. And can you talk about the study design that you're running?
Sure. So we have a phase I/II study. It is a dose escalation study. There are two cohorts of three to five patients each, and then an optional third cohort. The data we've seen from the first cohort of patients, the first five patients we've treated, has been so encouraging, and I'm gonna share some of that data, because we just did a data update. It's been so encouraging in terms of progranulin levels, that we have decided not to dose escalate.
Mm-hmm.
We are keeping cohort two at the same lowest dose.
Mm-hmm. Got it. Okay, and so can you walk us through the data that you've shared thus far?
Sure, sure. So, the really encouraging thing is the levels of progranulin that we've seen have been extremely high, so in the twenties to low thirties. This is markedly higher than any other clinical programs that we've seen that are replacing progranulin. And remember, this is a one-time therapy. So with one injection, our patients have demonstrated dramatically higher levels of progranulin than any other product in the clinic. The really encouraging thing, because this is a one-time therapy, we now have one patient, still early in our study, we have one patient who is out to 12 months, and that patient has shown a durable progranulin response. So we're not seeing any fading at all of the target engagement effect. Our progranulin levels stay high. The other thing we've seen, from these first five patients is a remarkable level of consistency.
Mm.
- in the progranulin levels. I've worked with cell therapies. I've worked with different gene therapies. I have not seen any product be this consistent. Now, it is only five patients, but an N of five that are all in a pretty narrow range of target engagement.
Mm-hmm
... is quite unusual for a gene therapy.
Mm-hmm.
So it is very high levels. They are durable, and they're consistent.
Mm-hmm.
So, everything that we could have asked for in terms of target engagement.
Mm-hmm
... it has exceeded our expectations-
Mm-hmm
... PBFT02. From a safety standpoint, we have safety data on five patients. The first patient we treated, we used a relatively low level of immunosuppression. It was oral steroids only for that patient. That patient had two SAEs that were related to an immune response. The other four patients got a higher level of immunosuppression, so instead of just oral prednisone, they also received three days of pulse IV methylprednisolone around the dosing of the AAV, and with that revised immunosuppression regimen, those four patients had no SAEs at all.
Mm-hmm.
People ask us also about high levels of progranulin. Are we concerned about it? There is no evidence in the literature of any deleterious effects from high levels of progranulin. Others in healthy volunteers have gotten to even higher levels of progranulin. And then I would just look at our patients. So far, we've got one patient out to 12 months. We have another patient who's about to have their 12-month visit. We have others who were followed up close to 6 months. We haven't seen any issues at all. So just look at what our data is showing.
Mm-hmm.
No issues.
The progranulin levels that you're reporting, that's in the CSF, right?
That's in the CSF, yeah.
The plasma, it's
In the plasma, it's normal.
Mm-hmm.
I wouldn't say normal. These patients start out with a low level of progranulin-
Mm-hmm
... in the plasma, and after getting our AAV that is injected directly to the CSF, there is no change in their plasma progranulin.
Mm-hmm. So how did these results align with what you predicted in your preclinical models?
... Yeah, so the preclinical models, at least the non-human primate models, so they exceed them-
Mm-hmm.
-but for a reason. In non-human primates, they develop antibodies to human progranulin.
Mm.
So we see a spike up in human Progranulin, but as soon as those antibodies hit, it just drops.
Yes.
We didn't really get a chance to see what is the effect, so they're really exceeding what we saw in non-human primates.
Mm-hmm. And so what gives you confidence that those levels that you're seeing are going to translate to clinical benefit?
Yeah, great, great question. I think the best thing to do is look at actual clinical data. This is a great space. It's a very attractive market. There are multiple players in it, and there are players who are ahead of us, who've generated data already that connect the dots. If you raise progranulin in FTD-GRN patients, you can improve markers of lysosomal dysfunction, you can improve pathogenic inflammation, and ultimately, you can have a clinical impact. Alector shared some great data from their phase II study, and they demonstrated all of those things. A modest increase in progranulin does all of those things. They connected all of those dots already. This is what we theorized would be true, because progranulin deficiency is the driving cause of this disease.
This is what we and others demonstrated in murine models preclinically, and they've already now demonstrated that in the clinic.
Mm-hmm.
So I have a huge amount of confidence that raising progranulin will matter, because I've actually seen it in.
Mm-hmm
... the data in people.
When could you start to see some of these clinical effects that would signal divergence from the natural history of the disease?
Sure. So you need enough follow-up to be able to show clinical effects. FTD with a progranulin mutation is the most rapidly progressive variant of FTD, but it still progresses over a long period. So you need at least a significant number of patients followed out for 12 months. Now, others in the field have looked at six to 10 to 12 patients followed out for 12 months before they're able to really see any signal of variants versus natural history.
Mm-hmm. And what kind of magnitude of effect are we talking about here?
Sure. So let me give you the range.
Mm-hmm.
So we've asked, we've done market research to say: What would be a meaningful change from baseline deterioration? And so anywhere from a 20-25% improvement, we hear is clinically meaningful. So that's the lowest bar. The top, the best that would happen would be a 100% change, which would be the patient is flat.
Mm-hmm.
They're not declining at all. So they're completely stable from where they start. That's the best.
Mm-hmm
... one could ask for. And then, what Alector showed is something in the middle. So they showed a 48% improvement from their phase II data.
Mm-hmm.
That is the range of possibilities.
Got it. And you touched on a little bit, regarding the other players in the space.
Mm-hmm.
Anything you could comment on what we can learn from what we've seen so far with some of the other gene therapy programs that have reported data and also aim to boost progranulin? Kind of what do you hope to do better?
Yeah. So one important thing, if you're going to get a one-time AAV therapy, is you want the product to be durable. You want. That is the promise of gene therapies, is a one procedure, one payment for the healthcare system, and you're done. And so what we are really excited about is, so far, at six months and 12 months, we've shown no sign at all. This product has shown no sign at all of decline or waning. It's shown great durability, and we think that's an important feature for a one-time gene therapy.
Why do you think you might see this differentiation in the durability?
Truthfully, we don't know. I don't think anybody knows. We have some hypotheses. So, hypotheses one would be difference in capsid.
Mm-hmm.
Our capsid for PBFT02 is an AAV1. The other capsid that's in the clinic, the Lilly product, is an AAV9. We know there are some differences in tropism. In our non-human primate studies, AAV1 had a dramatically higher tropism for ependymal cells. Ependymal cells are forever living cells. They're like neurons. They do not turn over, and they line the ventricles. AAV1 had a markedly more than forty times higher transduction of these ependymal cells. These ependymal cells live forever, and they're factories for churning out progranulin. That could be one reason for differentiation. There's elements of the actual AAV that are slightly different, so the actual construct. Some of them I don't think really would matter that much.
Others, you know, the Penn team, Jim Wilson and his Penn team, did our codon optimization. So codon optimization could result in up to a 15% difference in the codons that actually encode for the exact same human progranulin protein. And the reason codon optimization is done is to improve protein expression. So that could be... We don't know. These are just hypotheses. We just have to look at the data-
Right
... and look at what the data shows us.
Mm-hmm. Got it. And what is the advantage of the gene therapy approach versus, let's say, the Alector-type strategy?
Yeah. I would say the advantage is really for patients and their families. So we had a FTD caregiver come to Passage and talk to us about her experience taking care of her mom. And she talked about actually bringing her mom to appointments, and she said for her, it was she was used to it now, but for other people in the family, it was very difficult. She told the story of she had because patients with FTD, they have very bizarre behaviors. She would have a card that she would give to people that said, "Please excuse my mother, she has FTD." And once she started passing around that card, it just made it easier to go out in the public, and she was used to it, but her family members couldn't do it. Other people couldn't do it.
So now you're asking someone to do this once a month-
Mm-hmm.
indefinitely, and I think that is going to be difficult to go once a month to get a procedure. Certainly, when there's no other alternatives-
Mm-hmm.
Absolutely, people will do that. But if there is an alternative for a one-time therapy, we do think that'll be attractive to some patients and their caregivers.
Mm-hmm. I see. And then turning to the twelve-month readout, can you frame expectations for the data release?
Yeah. So the next most important thing that we wanna show is consistency. So we've shown one patient out to 12 months, that's with a durable response. We'd like to show additional patients. We have some early data from patients four and five that we just shared. It was only 30-day progranulin levels, but we wanna see beyond that also. We also wanna show consistency in safety. And I think the other thing that is important, that we've heard is important, is we wanna show that we have turned the page in our clinical operations, and that we are able to recruit patients, enroll them, get them into the study in a timely manner. That's one thing you asked me, your first question was, what's different about Passage Bio now?
That is different about Passage Bio now, because we are focused on clinical execution in one indication, and enrollment has been very brisk for Cohort Two, so we're very encouraged by that.
Mm-hmm. And when do you expect to start to share some of the clinical aspects beyond progranulin?
So I would look at this as dots along a continuum. So the next dot along the continuum that we think is very important is other pharmacodynamic biomarkers, so markers of lysosomal dysfunction.
Mm-hmm.
So that should be the next thing-
Mm-hmm
... that we talk about. Markers of pathogenic inflammation are also-
Mm-hmm
... would be next, such as GFAP.
Mm-hmm.
And then, as I mentioned, probably far on down the line is clinical.
Mm-hmm.
So you really need enough data to share clinical differences-
Mm-hmm
... in CDR.
Then do you plan to share the lysosomal dysfunction and the GFAP data at twelve months?
We wanna have at least-
At least, yeah.
... twelve months of data.
Mm-hmm.
Enough patients with 12 months of data-
Got it
... to be able to share that. And I say that because if you look at what others have shared, in this area, in PD biomarkers, there's a lot of variability.
Mm-hmm.
The error bars are pretty big. Some of them, you know, some of the patients, actually, some sets actually start pretty close to normal. So these are exploratory biomarkers. You need enough of an N to really get a signal.
I see. Okay, and then in terms of the program itself, what kind of feedback have you received from regulators?
Sure. The most recent feedback we received was on the FTD-C9-
Mm-hmm
... program, and I think that's important because it, it tells something about safety of this level of progranulin. So we went, and discussed with the FDA, expanding our current study to treat FTD-C9 patients. FTD-C9 patients have TDP-43 pathology.
Mm-hmm.
There's a fair amount of preclinical evidence that shows raising progranulin to super physiologic levels can ameliorate TDP-43 pathology. So we presented them that evidence, and then we also presented them our safety from our ongoing, FTD-GRN study, and we asked to move into FTD-C9 with the same dose-
Mm-hmm
... knowing that those FTD-C9 patients start a little bit higher. They start with a normal level of progranulin-
Mm-hmm
... about five rather than two to three, and so they're gonna get to a higher level of Progranulin also-
Mm-hmm
... with our same dose, and the FDA did not have any issue with us moving forward at that same dose. This is what we advocated for, this is what we thought gave the patients the best opportunity to get a response, and so that tells me indirectly, that if they had some concern about us being at levels of, say, thirty-
Mm-hmm
... which is where we are right now, they probably would have told us to start-
Right
... at a lower dose.
Mm-hmm.
But we haven't found any reason for concern, and my assumption is they haven't found any either.
Mm-hmm. Got it. And then how-- back to the FTD-GRN-
Mm-hmm
... specifically, how do you envision the regulatory path there?
Sure. So in the second half of next year, we will be discussing with the FDA our pivotal design.
Mm-hmm.
So we'll go for end-of-phase-two feedback in the second half of next year. Now, along the way, we've also had other discussions with them and will have other discussions with them around manufacturing. These are important. These are the things that can trip people up at the end.
Mm-hmm.
Without going into any specifics, we've been very encouraged by our interactions with the FDA around a few manufacturing-
Mm-hmm
... issues that every program needs to address before going into pivotal.
Mm-hmm. Do you think accelerated approval could be an option in this type of indication?
Of course. So, FDA, and CBER in particular, has emphasized that, accelerated approval is a great option, especially when there is a high level of unmet need. I would say the state of the data right now, where it is, there may not be enough data-
Mm-hmm.
-that has fully connected certain biomarkers to clinical outcomes. Now, two years from now, there may be enough data. So, we want to, in a pivotal design, we want to be able to give ourselves flexibility for that-
Mm-hmm
... new type of world where there is enough data, including the data that we generate. I do think, that in this space in particular, I'm encouraged by what I've heard, publicly, from what I read from others'-
Mm-hmm
... press releases about their discussions with the FDA, and what I read from that is that there is an openness to having biomarkers.
Mm-hmm
... contribute to a potential approval, that they can support clinical outcomes, particularly if the clinical outcome is moving in the correct direction.
Mm-hmm. Got it. And looking further ahead, do you plan to develop this program and take it all the way internally, or is this something you might partner at some point, for example, in some geographies?
Yeah. So, we will definitively plan to do it ourselves, but we also will definitively be open to any discussion. Our goal is to get this product to patients.
Mm-hmm.
We think it can demonstrate, it will demonstrate the ability to improve clinical outcomes, and so we are open to any option, including discussions with strategic partners.
Mm-hmm. And so earlier, you talked about expanding the program to C9.
Mm-hmm.
Can you briefly elaborate a little bit on the rationale there, and what gives you confidence from a biology standpoint that this approach will work there as well?
Sure, sure. So, there's a few threads of biology.
Mm-hmm.
First, lower levels of progranulin are a risk factor for more severe disease.
Mm-hmm
... in multiple dementias. Second, most importantly, is getting high levels of progranulin in preclinical models of TDP-43 pathology has been shown to improve TDP-43 pathology, and in the models that we've seen, those levels are actually quite high. They're about two to three times the normal level-
Mm-hmm
... of progranulin. So given the profile of this product, that it can actually get to two to three X levels of progranulin, which I don't think other products can do, this is the perfect opportunity for us to test that hypothesis. I would also say that it is relatively low risk for us to do this. We think this could help patients. There really are no options for FTD-C9 patients, and we have an ongoing study of FTD.
Mm-hmm.
This only requires a protocol amendment. We have supply, we have plenty of supply to treat all 15 FTD-GRN patients and start treating FTD-C9 patients. So we don't have to manufacture any new batches. We don't have to start a new trial.
Mm-hmm.
It's just a protocol amendment. So the marginal cost of trying this is relatively low-
I see
... and the marginal benefit for patients is huge.
Mm-hmm.
And the FTD-C9 population is significantly higher than the FTD-GRN population.
Mm-hmm. Got it. And so what are the next steps here?
Next steps are, we are moving that protocol amendment through the sites, and we are targeting first half of next year to dose the first FTD C9 patient.
Got it. So in general, we've been in a pretty challenging financial environment for the biotech space. You talked about portfolio prioritization decisions.
Mm-hmm
... including the out-licensing the pediatric gene therapy programs to Gemma Bio. Can you talk a little bit more about how you're prioritizing advancing the FTD-GRN program, as well as the other applications there?
Sure. So, it's pretty simple. The FTD-GRN program is our number one priority.
Mm-hmm.
It is the focus.
Mm-hmm.
It is the vast majority of our investment. It is the one thing that we are laser focused on-
Mm-hmm
... because that is the engine that drives everything else. So that one is pretty-
Mm-hmm
... pretty straightforward. So we used to be a balanced clinical and early research company with our support of the Penn early research, but now we are heavily focused on just clinical execution-
Mm-hmm
... and generating data in indications that are meaningful.
Mm-hmm. Got it. And lastly, in the last couple minutes, what do you think investors might be missing about Passage Bio as it is today?
Sure. Well, I think what investors do get is our differentiation-
Mm-hmm
... in that we can achieve markedly higher levels of progranulin, and in a one-time therapy, we've been able to show a durable effect, and we've been able to show safety. So they can see that differentiation. What they may be missing is what we talked about earlier, the dots connecting raising progranulin to clinical outcomes. Others have already drawn those dots out.
Mm-hmm.
When people ask me: Well, how do you know raising progranulin is going to work? I say, "I just read papers, and I look at presentations, and I look at actual clinical data, and it does appear to be doing what we expect it to do." I think that's one big thing that investors miss. I think the other big thing is this halo around gene therapy, and that all gene therapies are kind of lumped in this category. It's a heuristic of, you know, gene therapies, they're risky. You know, you wouldn't say that about small molecules.
Mm-hmm.
Some small molecules work, some don't. So is the indication the right size for a commercial launch? Is there a true unmet need? Are patients satisfied by another product or not when you launch your gene therapy? The manufacturing issues are very idiosyncratic to a particular therapy. So have you worked those out? So I would say looking at gene therapy as a monolithic category-
Mm-hmm
... it's, I wouldn't do that. I would look at the specific asset.
Good. There-
Yeah
... that's a good point. All right, I think that brings us to the end of the session.
Okay.
So thanks again-