Okay, Steve, Senior Biotech Analyst here at RBC Capital Markets. Today is our great privilege to have REGENXBIO with us as part of our 2025 Healthcare Conference here at RBC, representing the company. We have Curran Simpson, Chief Executive Officer; Steve Pakola, Chief Medical Officer; and obviously Mitchell Chan, Chief Financial Officer. Guys, thanks so much for taking the time. Looking forward to the conversation here. We do have a long list of questions here, but maybe before we go into those questions, given this is fresh off the press, maybe if you don't mind, I'll start with you, Mitch, just walk us through the deal that you have announced yesterday, what's the rationale behind it, and why you're excited about it.
Yeah, I think the deal yesterday was a very opportunistic, non-dilutive financing. It really allows us to pull forward some of the midterm royalty stream and bring it forward to today so we can get ready for pre-commercial launches, such as getting ready for 202, as well as RGX-314. As you probably recall, we are expecting top-line data early next year for both 202 as well as 314. This capital will get us well beyond just the top line and into commercial launch. This financing deal was really opportunistic, as I kind of described. When the primarily for genital and intrathecal data came to light, we actually got multiple bids, and this was the best offer that we received, given that it was limited recourse. In other words, if for whatever reason the sales performance of these products do not perform well, the company's under no obligation to repay it. Having said that, if it becomes a blockbuster, the royalty stream remains with us. The tail and residual value of these royalty streams remains with the company. There's good debt and there's bad debt. There's clearly a good debt to have.
Sure. No, super, super helpful, especially in this environment. All companies probably need to be a little creative with how you extend the runway. Maybe I want to jump into the FDA. Obviously, some changes with Dr. Prasad at CBER has been historically pretty outspoken against the approval of Sarepta. I think he has been a little critical also on kind of using surrogate biomarker more broadly, even in his category, if you will, with MRD for multiple myeloma, which, again, not necessarily related to you guys, but it fits in the broader themes of surrogate endpoint and approval. Maybe Curran, what's your take? What was your reaction when you saw Dr. Prasad being nominated and how you're thinking about implications for REGENXBIO?
Yeah, I think it's something we are keeping a really close eye on. Obviously, we're in the middle of a BLA review for our Hunter program. And so we have sort of day-to-day or week-to-week interaction with FDA at the review level. To date, we see this sort of operating as business as usual. The type of information requests that we're getting, as you know, Hunter is also an accelerated approval pathway submission, are pretty ordinary information requests, meaning details of CMC, but not anything that would make us question the overall strategy for accelerated approval. I think the Reagan-Udell meeting, as an example, was one where industry and FDA and others, patient advocacy groups, came together. I think those discussions, I think, still make sense and still are in the interest of bringing new therapies to patients as soon as possible.
I think we'll stay tuned on developments and continue to push hard on accelerated approval. What really, I think, matters the most and what mattered when we reported our first Duchenne data last November is, can you associate consistent microdystrophin levels with functional benefit? If the answer is yes to that, then I think we have a really good discussion coming with FDA, assuming that our pivotal data set reflects that initial data.
That is super helpful. Maybe, Steve, if I can pivot to you quickly. Obviously, the tragic deaths of the patients in the Sarepta commercial settings, like what has been the broader reaction from the DMD community? Are now docs being a lot more cautious in prescribing this in non-ambulatory patients? Is that informing in any capacity your strategy going forward here for your DMD program?
Sure. I and a lot of our team were on the ground at NDA. It was quite a coincidence when that news came out, but it did give us an opportunity to speak to our investigators and a lot of the key thought leaders in the space to get really an immediate reaction. I think there was the understandable, how to describe this, initial instinctive caution, somewhat reminiscent of what happened with the Pfizer safety issues, almost like a déjà vu. I think at a macro level, there was that initial caution. The more we spoke to the leaders in the field, the more it also became clear that you have to look at the context. This was an older boy, a heavier boy, non-ambulatory boy, where there always has been that the risk may be greater there, both because of a higher viral load per kilogram-based dosing and also the comorbidities that exist in older boys. I think there's more caution when you think of that end of the spectrum. It was really interesting, Luca. There was, for us at a more micro level, if you look at different programs, this really shined the spotlight on safety, of course.
There's always safety first when you consider this. It really reminds the field of that. That's where we actually had investigators coming to us saying how comforted they are with what we've seen from a safety standpoint, where we've seen zero liver AESIs in our phase I study that were of special interest, including none related to the liver. It has always been known that 40% or so of the levitates have LFT elevation. That is creating and supporting the differentiation that we see with our program and also supporting our original decision to have a very robust immune modulation regimen that is relatively short, but gives you, the investigator, and the patient families comfort to really mitigate the risk of this type of fortunate event. How does that relate to enrollment? We are seeing no change in our patient funnel. That is why we continue to be excited about the pivotal enrollment this year.
Got it. Got it. Super helpful. Maybe just one more on kind of Sarepta. Obviously, they also lowered the guide, differential guide for the year. Is that a good thing or a bad thing for you guys? On one side, you can argue it's a good thing because maybe by the time you launch, the prevalence pool, a larger proportion of the prevalence pool will be up for grabs for you guys. On the other side, you can maybe take the other argument and say that maybe the demand is not as robust as some of us who were kind of originally anticipating. Good thing or bad thing?
I think if you look at the launch in totality, it's a successful launch for an AAV-based program. We're certainly rooting for more of those. I do think, to your point, it provides more opportunity. If we follow our path through a filing in 2026, we would expect an approval in 2027. As you mentioned, the prevalent market would be even greater than we initially were estimating. We were thinking at least half of it being available at that point, perhaps more. I hope that if there is hesitancy in Duchenne, some of that hesitancy is potentially waiting for a second-generation program to come along that has differentiation in terms of benefit to risk ratio. This is the opportunity that I think we have. We're at all the meetings this week here at Duchenne. We'll be at PPMD talking with investigators and getting a better feel for sentiment in general. We really like the profile of our program and think that it does have a fit and will have a demand associated with it, which we're seeing in our clinical setting, but down the road in commercial.
That's super helpful. Maybe one more in the competitive landscape. Maybe, Steve, for you, going back to you, what's your views on the skippers? It feels like the DMD field is making some meaningful progress when you look at some of the conjugated, whether with the monoclonal antibody or an antibody fragment, no high-level expression that we have historically seen from the naked constructs with Sarepta. Appreciate this is not necessarily like we can debate if it's complementary or competitive, but what's your view on how the two technologies will coexist in the market once hopefully all of them become reality?
Yeah. First, I'd say we're excited in all the different areas we work in, particularly treating these patients and helping the family. It's exciting to see different modalities advance and some of the encouraging results that are seen. We definitely see it as complementary and that there's always going to be a need for improved therapies and to have a one-time gene therapy where you can have some activity. That can be mutation agnostic, I think, is the other aspect. There's always going to be that need beyond the traditional high-prevalent exon mutation. Excited to see the field move forward and feel excited to potentially play a prominent role in that, given the differentiation that we so far see with our product.
Sure. That's super helpful. Yeah, there's an argument. We'll see how the payers respond, but it's not inconceivable that if you have a family member that has it, you'll consider both, right? Maybe some therapy first, maybe skippers down the line. That is very helpful. Maybe let's talk about one more on kind of competitive solid bios out there also with some pretty interesting data. What's your big picture view on their data first? Then, how are you thinking about the cardiac biomarkers and how you plan to capture cardiac benefits there?
Sure. I think a couple of key factors in looking at data is how long out do you have the data and what kind of sample size you have. Still early days. I think there is the microdystrophin expression levels. I think still to be seen how that translates in terms of functional data and also what you might expect to see in older patients, which is where we in the field are very excited with the data that we've seen. Quite surprising for the field, high consistent levels, even at age above age range, which has not been approved or other therapies. Cardiac function for us and the field of investigators, others that we speak to in the field, it makes sense that that really is the safety biomarker in the short-term standpoint. When you're looking at three, six, and a year here, you're really looking at safety. It really takes longer to really evaluate on the efficacy side of the coin. That's even more the case if you're looking at younger boys that you haven't yet seen actual dysfunction. I think that's really how we look at it. I think time will tell. We certainly look at ejection fraction, MRI. We'll be looking at those things. Realistically, it's going to take longer than a year to be looking at that other than as a safety.
That is super helpful. Maybe, Curran, going back to you, there's a data update, obviously, coming up this quarter. Just give us a little bit of a preview on what we should focus on and maybe what's the extent of the functional data that you're going to be able to share with us and how you're going to help us contextualize this data versus natural history or baseline characteristics or any of the other components there. Any thoughts?
Yeah. If you go back to our release last November, you're going to see a lot of consistency with the approach we took there. We'll primarily focus the update on dose level two, which is the same dose we have in our pivotal studies. We'll expand. At that time, we reported nine-month data on two patients. We're pointing towards, although it's still in draft form, nine-month data on five patients and roughly 12-month data on roughly four patients is what we're pointing towards. I think that the comparisons will be made versus their baseline incoming functional capability. We'll also do the external match controls that we showed before to compare where those patients would have been based on natural history and do the comparisons and try to equate that to what we consider a clinically meaningful difference.
Very similar approach to what we did in November, but the main goal here is for those that said, "Well, it's only an N of two." Now we're trying to enlarge that data set. I would expect the second half of this year, more focus on our pivotal study enrollment updates. That'll point us towards the first half of next year. We'll be really excited to report out our top-line data from the pivotal study.
That is very, very helpful. Maybe in the interest of time, let's pivot to Hunter. Maybe just what's the latest thinking on that one? What's the likelihood of an adcom at this point? Obviously, thinking about the PRV and mechanics around the PRV and the timing. And then maybe, Mitch, if you don't mind us maybe remind us the economics that you have still left in that program. That was our current go ahead.
Yeah. So we're well underway with the review of the BLA submission that was filed. Not too long ago, we reported that we had gotten acceptance of the BLA, which is, I think, an important derisking element to a filing for accelerated approval. We see a steady stream of information requests coming in, which is a good sign of active review ongoing. I feel really good about that. Now, in terms of the adcom, we don't have a final view yet from FDA, but we are, number one, preparing as if we need one so that if one is required, we're ready to go. We think the precedent, there's a program in front of us for MPS III that they've been public about not needing or not requiring an adcom from FDA. We think that if you equate that to a similar program in MPS II, that the likelihood is fairly low. We will be ready either way. I think all of this, in general, the information request, the acceptance of the BLA really does derisk PRV, which we would be eligible for upon approval. Mitch can talk a little bit about the recent market, if you will, of the disease monetized.
Yeah. So I think the PRV, last five data points has gone north of $150 million. We still own 100% of the PRV, so we can actually afford to see how the market evolves as we get closer to approval timing. Regarding the economics of the deal that you disclosed yesterday, for the product sales, we do get royalty streams. We basically said meaningful double digits. That would obviously contribute to the bond at this stage. Once the bond is repaid off, that royalty stream, any proceeds will come back to us at that stage. Any development milestones, the vast majority we actually retain, that remains intact for the company.
That's helpful. Let's maybe pivot to ocular here. Maybe, Steve, back to you. Just walk us through kind of your big picture strategy. I feel like the whole space of gene therapy for wet AMD or DR kind of cooled off recently. There's a little bit of a perception that maybe the standard of care has made so much progress, especially on the wet AMD side, that both Vabysmo and some of these novel approaches, do we even need some therapy for wet AMD? What's your take?
I can't help but take the latter question first.
You're going to do that.
Yeah. Curran and Mitch can speak to the outside-in part, but having worked in the retina space for a lot of years and seen the nice evolution of anti-VEGF treatment options, and there has been for a while a recognition of the big unpredictability, less treatment burden for patients because they're simply not getting anti-VEGF injections. We've seen incremental advances, first Eylea, now Vabysmo and Eylea high dose, where these are blockbuster potentials that are being proven. Really, though, this is truly incremental. We're talking about extending the probability of needing every eight-week to 12-week or in some patients, 12-15 weeks. Even that relatively small incremental benefit is leading to blockbuster potential.
We actually view this as validating us as opposed to worrying about anyone needing our lunch because this is a paradigm shift in terms of being able to tell a patient not that, "Okay, you're still going to need injections for the rest of your life," but it may be a little less frequent, which they value and the clinicians value. Here we're talking about dramatic reduction treatment burden over 50% as a target and even a sizable proportion of patients that may not need any injection for a disease that needs treatment, anti-VEGF for the rest of the patient's life. For us and AbbVie, this is why we in Big Pharma, who understand ophthalmology and global potential here, are excited about our strategy.
Pivoting to the first part of your question, we and AbbVie continue to advance on our initial subretinal program for treatment of wet AMD with our two pivotal studies, ATMOSPHERE and ASCENT, enrolling 1,200 patients, the largest gene therapy program ever executed. This is on a global basis. It's very important to us, but also AbbVie. We're going to complete enrollment this year to allow for top-line pivotal results to one-year endpoint next year. There's a lot of excitement there as we advance toward that. We and AbbVie are also super excited about in-office suprachoroidal delivery where we've announced along with AbbVie plans to advance into pivotal development for diabetic retinopathy later this year. To your question of potential with anti-VEGF, given some of the increased duration of products, this space is completely available just to a one-time in-office patients at that stage where you want to prevent the vision-threatening complication. They're still asymptomatic at that stage. We're seeing that those patients are not signing up to get repeated injections no matter how infrequent they are. That's one of the reasons we at AbbVie are excited about advancing.
That is super helpful. Maybe one last one on subretinal for wet AMD. Obviously, the pivotal data is coming in the foreseeable future, the two trials that you just articulated, but it feels to me that the primary endpoint is pretty high POS, right, given just the way the trial is designed. I'm actually thinking about a secondary endpoint. What's the bogey here for actual clinical adoption? Do we need to show at least 50% of patients that are injection-free in one year? Should the number be higher? This is requiring an operating room. What is the bogey in the secondary endpoint?
Yeah. It's interesting, Luca. The response from the clinicians over the years has been pretty consistent. It's really been around that 50% segmentation. That's always been our target profile. It continues to be because, as you can imagine, we're constantly keeping our finger on the pulse. It really, again, comes back to that value proposition where if you can increase the disease burden that much, including patients who don't need injections, that is really getting a lot of traction.
Got it. That's helpful. Suprachoroidal, quickly, what's your latest thinking on safety? You guys have obviously optimized some of the regimen here to minimize the risk of inflammation. What's your latest thinking on that potential risk, which is key, especially in patients where the bar is pretty high given the current standard of care is actually pretty safe?
Historically in this space, a lot of sensitivity to inflammation, particularly. With gene therapy, particularly with intravitreal injection, where the issue is the non-localized, non-hardened delivery where you get off-target, significant safety. That is the reason, right from the beginning, for our follow-on to subretinal in an attempt to get in office, a requirement was that it be around an administration that preserved the really nice aspects of subretinal, which is being sub-hardened as opposed to the target tissue. That is what we have in suprachoroidal. We believe that is a big component of why we have seen such good safety where we only apply a relatively short topical prophylactic steroid regimen. We need a lot shorter than what has been needed for other programs, particularly in pivotal, which is very important to the clinician. I think we are in a really good position. We've already hit our target product profile on the efficacy side from our phase II study. I think we're really set up well for pivotal.
Super helpful. Maybe Curran, last question for you. Big picture, what do you think is the most underappreciated aspect of the REGENXBIO story that we haven't asked you or any kind of closing remarks or any thoughts before a rapid conversation?
Yeah. I think if you look at what we heard today, the cash runway being improved with the recent deal with HCR, and then pointing to next year's top-line data on three pivotal programs, I think we're in terrific shape. One thing I would add to the mix is from a gene therapy aspect, we're the only one with in-house manufacturing scale that we have. So these high-dose AAV indications like Lushen, where you have in-house manufacturing able to make 2,500 doses per year at a great cost of goods, that's a differentiator for us that maybe people are missing right now. As we get closer to launch, that we think more about.
Got it. Super close. I have 300 more questions, but no more time. Thanks again for joining us. Thanks, everyone, for joining us for this conversation. Yeah, we'll talk soon.
Thanks for having me.
Thanks again. Absolutely. Thank you.