I'm Gula Lifschitz, a biotech analyst at Chardan, and welcome to this session on cardiac gene therapy. The space now has several programs that have delivered some exciting proof-of-concept data. As with other segments in the space, there have been some setbacks. For example, safety signals in the adenosine therapy program and discussion about the extent of read-through on risks from other systemically administered gene therapies, like elevitus. We've also seen potential tailwinds, including regulator commentary that's been supportive of gene therapy in areas of high unmet need and continued momentum for precision medicine in the space. In this session, we'll explore the clinical, regulatory, and commercial outlook for gene therapies for cardiac diseases. I'm joined here by our panelists.
We have Rick Modi, CEO of Tenaya Therapeutics; Tracy Dowling, CBO and General Counsel of AskBio, which is a wholly owned and independently operated subsidiary of Bayer; and Nolan Townsend, CEO of Lexeo Therapeutics. Thank you for joining us today. Maybe let's start by having each of you briefly introduce yourselves and your company's pipeline. Let's start on this end with Rick.
Sure. First, Gula, thanks for having us on the panel. Good choice on the location of the hotel, by the way. I especially like that you have one elevator reserved for people going up and down, so elevators aren't liked. Rick Modi, CEO of Afinia Therapeutics, one of the founders of the company. Prior to this, I was at a number of other companies. I've been fortunate to have been part of teams that have brought, I should say, I could make a brought an award to, that have brought nine different drug approvals and launches to patients. The most recent one was Zolgensma, a systemic therapy for spinal muscular atrophy via Avexis and Novartis. For Afinia, our vision is very, very simple. We would like to bring gene therapy to patients not only in rare diseases, but also in prevalent diseases.
We have a suite of technologies that we've been developing over the last few years that are novel capsids for the muscle and CNS, as well as proprietary plasmid rearrangement systems that bring cost of goods sold down tremendously. In terms of pipeline, our main focus is in cardiovascular and neurological disorders. We look for diseases that are high, of course, medical need, but also ones in which there's a clinical and a regulatory path to approval that is sufficient, and one in which the conventional capsid might be limiting. This gives us an advantage with our technologies that we have. The lead program is BAG3 dilated cardiomyopathy, heart failure that affects people in their 30s. We have a capsid that goes to near 100% of these heart cells that we've shown in non-human primates. We've shown efficacy differentiation against conventional capsids in the gold standard mouse model.
IND to be filed later this quarter and clinical results in the early part of next year. Excited to be here.
Great. Tracy.
Great. Hi. Thanks. Thanks for having us. I'm Tracy Dowling. I'm the CBO at AskBio. At AskBio, we have our two lead programs that are in phase twos right now that we're enrolling for. One is in Parkinson's and the other is in heart failure. At AskBio, we are committed to gene therapy, particularly with AAV and bringing them in both common, which are the two I spoke about, our leads, but also in rare diseases as well. We have three others in our pipeline. We're really interested in the power of AAV and improving it through in our clinic.
I'm last but not least, I guess. Lexeo Therapeutics is a clinical stage genetic medicines company focused in cardiac disease. Our two most advanced programs are treating rare diseases that are mediated by the heart. The most advanced one is treating the cardiac pathology of Friedreich’s ataxia. This program is also showing some benefit in treating the neurologic component of Friedreich’s ataxia as well. We're rapidly moving this program into a pivotal study next year. Our next most advanced program is treating arrhythmogenic cardiomyopathy. Here we're focused on the plakophilin 2, or PKP2, mutation. This is about a 60,000 patient rare disease in the U.S. It is one of the larger targets in, let's say, cardiovascular gene therapy. This program, we're completing a phase one study this year. We'll have a data readout for this program at the JPMorgan conference early next year. Both programs are moving rapidly.
We have a preclinical pipeline in HCM and other arrhythmogenic cardiomyopathies as well.
Great. Nolan, maybe let's start with you. Lexeo has shared some data from your genetic cardiomyopathy programs. The trials there incorporate biopsies for transgene expression, as well as several imaging biomarkers, circulating biomarkers, and clinical endpoints. Can you expand on the metrics that you're using and how they individually or collectively give you, as well as your investigators, a sense that your therapies are working?
Yeah. I'd even take a step back. I think, at least from our perspective, the heart is the ideal organ to treat with gene therapy for a number of reasons. You've just highlighted several of them. We have several, let's say, non-invasive ways to measure the therapeutic benefit of the therapy that we're delivering. One is through cardiac MRI, through echo. We can look at EKG, Holter monitors. These are all sort of non-invasive ways to evaluate the impact of the therapy. Several of them, you can evaluate pretty rapidly or in a pretty rapid time frame after treating the patient. We also have, we can take tissue samples of the heart. Can't necessarily do so of the brain, for example. That's an advantage where you can actually understand the tissue transduction of the gene therapy.
In addition to that, we have a lot of important clinical endpoints in cardiac disease. There's a number of cardiac scales. There's other cardiac endpoints that we look at from a symptomatic perspective. Shortness of breath, we can look at other functional endpoints, New York Heart Association Class. We can look at KCCQ. There's a complete range of tools when designing clinical trials to evaluate the improvement in the disease that one could experience. Today, the FDA has become more open to biomarker-based approvals. For our FA study, we're looking at two biomarkers as the co-primary endpoints for accelerated approval. One is an imaging endpoint, left ventricular mass index, where we look at cardiac hypertrophy. The patients we've treated to date that have started with abnormal hypertrophy or abnormal left ventricular mass index, all of them have gone into the normal range.
We've been able to show via imaging that we've impacted the hallmark of cardiac Friedreich’s ataxia and normalized the patients. We can look at other endpoints like troponin. It's a blood-based biomarker looking at cardiac cell death. I'm describing the range of tools that are available, but also the degree of treatment effect that we can observe with those endpoints and how they look at different components of the disease. The FDA is open to these endpoints to support accelerated approvals.
Just to link down on that, the endpoints that you talked about, to what extent does there read-through from other therapies within the cardiac space that give you a sense of what's clinically meaningful in terms of modulation of a particular biomarker or imaging endpoint?
Yeah, I think there is. I think the precedent that's being set with our programs in HCM, looking at, for example, left ventricular mass, looking at troponin, and then in arrhythmogenic cardiomyopathy, whatever develops there, these will be a good precedent for the rest of the field in terms of the types of endpoints that could be considered for other diseases that should de-risk the regulatory path for things that are coming in the future. If you look at FA and the hallmark of the disease being HCM, to the extent you can normalize cardiac hypertrophy, this should result in a downstream impact on mortality because that's what mediates mortality in that disease. We think these are great surrogates. Obviously, they need to be paired with functional clinical benefit from a confirmatory perspective. I think those endpoints are there and can be achieved at some later time points.
To get these therapies to patients faster, we need to focus on surrogates that can show a benefit quickly. We're showing clinically significant benefits in cardiac hypertrophy within six months of treatment in our FA program. These are very early signals of efficacy that ultimately can be clinically meaningful in the future.
Great. Rick, Afinia Therapeutics is advancing gene therapy for BAG3 dilated cardiomyopathy. You guys are using a novel cardiotropic AAV capsid that you developed. What are some of the learnings from other programs and your prior experience that you're incorporating into your strategy here?
Sure. As I mentioned earlier, part of the thesis of the company is recognizing that there are many diseases where conventional capsids might not just cut it. Our first learning from many of these programs is one around product design. When we evaluate the market that is out there, and more so in the clinic, what we recognize is that as sponsors push the dose, which is necessary to get more cardiomyocytes transfused and the effect size that you would like to see, unfortunately, in some diseases, they run into dose-related toxicity. By doing that, sponsors end up having to lever into immunosuppressant regimens that might be perhaps a bit more necessary. With the way we've designed TN-201, we designed a brand new capsid. This is an RGD peptide on an AAV9 backbone.
It uses a novel receptor base called integrase, which allows this capsid to transduce many more cardiac cells than conventional capsids could do. For some diseases, such as BAG3 dilated cardiomyopathy, where that protein is cell autonomous, meaning it is not secreted from one cell and able to cross-correct another cell, you need a capsid that can get to as many of the cardiomyocytes as possible. This is exactly how we designed TN-201. At a remarkably low dose, 1.0 x 10^13 vector genomes per kilogram or lower, 10 times or lower dose than what other sponsors might be using out there, we're able to get nearly 100% of the cardiomyocytes, for example, in non-human primates.
We designed the gene construct such that not only do we get to the cardiomyocytes, the tissue of interest, but we also de-target the liver and the DRG, the two other areas where, unfortunately, in the clinic, we have seen toxicity in people. The first learning that we take is how do we have a capsid that is fit for purpose for the disease, that will be at a remarkably lower dose and be much safer and more effective than other constructs might be able to do. The second learning that we take is from just excellent topics that Nolan articulated. We love the heart as our primary lead indication because it's a disease and a tissue that you can biopsy.
For a new program, as a lead indication for a company like ours, we can biopsy the heart, show that the protein and the mRNA and the DNA are increasing compared with the baseline, which you could not do in the brain or some other tissues as well. In addition, as Nolan also identified for his company, the path towards an approval is much more well-trodden, both for gene therapy and for other cardiac programs out there. There is a first in human trial design, which is typically in gene therapy a dose escalation design with a low single-digit number of patients. There is a second part, which is a dose expansion or an expansion trial, which has the potential to be a pivotal BLA-supporting design. In our dialogues, early as they have been with the FDA in the pre-IND meeting, we got great receptivity to that concept.
That is the leverage that we're taking from other parties, be they in gene therapy or outside of gene therapy, using an efficient trial and development program that would get us to BLA potentially as soon as submitting in 2027. The endpoints are also very well established, both for clinical precedence, ensuring not just safety and tolerability, but efficacy in as soon as four weeks and as most as three months. The ones that Nolan mentioned, protein expression in the heart, but also KCCQ, which is a quality of life measure, NYHA class, which is a functional measure, PVO2, a very objective measure, and then also the imaging measures. In our preclinical study, we were able to show normalization of ejection fraction and reversal of the structural damage in this disease within four weeks. That is a really quick ability to show effect for a gene therapy.
We're hoping that we can show something like that in the clinic in between the one-month and the six-month time frame. Lastly, the learning that we also take is just one around trial operations. We're very pleased with the path that's been paved for us by other sponsors with courage in just getting these centers that otherwise would have been quite conservative now trained up, trained up in how to get gene therapy approved by the IRBs, in how they identify these patients, in how they manage safety events that might come up, and also how you discussed recruitment and enrollment opportunities directly with patients. We are definitely piggybacking on both the trial site footprint that others have used, as well as direct-to-patient opportunities and the lab and third-party service providers that are now quite well-versed in how to run trials.
Great. It's encouraging. Tracy, AskBio has reported data this year in congestive heart failure, as I think you alluded to. That's not a rare disease indication. What made that an attractive indication for you guys to pursue with your gene therapy approach? What does success look like there?
Yeah. It's not. We have a mixed approach of common and rare diseases. It's interesting. The unmet need is significant. Yes, it's clear in rare diseases, there's huge need. To have larger patient populations to be able to affect, there's a huge need for it out there. That was one of the reasons we, rather than starting with a rare disease and building to a more common, went after it in that way. We've been pursuing it through. What does this mean? It is harder because the trials are bigger. They're more expensive. You need more patients. My colleagues up here are talking about biopsies. Biopsies are fantastic. You can get so much data from them. When you already have a patient that you're bringing in to a double-blind, placebo-controlled sham surgery, and on top of it, you're asking for a biopsy, it's gold.
It's really hard to convince those people. I don't know how you guys feel. Do you feel like it's hard to convince patients to do the biopsies on top of it?
At least for us, our studies are structured differently. They don't have the placebo control element. I'd say there's one answer in HCM, another answer in arrhythmogenic cardiomyopathy.
Yeah. For us, it just feels like there's a huge patient piece of this that I wanted to bring in. We can design great trials with great endpoints and touch a lot of unmet need. Again, the education, bringing the patients in, our phase two is large. It's going to be 80-plus patients, and it's global. This is one, we were acquired. When this started, AskBio had not yet been acquired. I don't know that a global study would have been possible without Bayer's expertise in running the European and global side of this. They have been a fantastic partner. I think when you start where you started with is why rare versus common? Why can we do common and stick with it right now? I think it's because who's supporting us outside of this as well.
That's a good point. Within congestive heart failure, what does success look like here? How are you thinking about advancing there?
Yeah. We are excited. There was actually a publication in Nature that came out today that's talking about our phase one results on safety. There's also efficacy endpoints that are discussed, just very similar to what my colleagues are talking about here. What we're hoping for is, I'm sort of repeating, so I'll try to do it quickly. It's the same thing. We want to have the endpoints where we have clear data that shows that we've met them. We'd love to move this program through as quickly as possible based on those, and then get the commercial piece, which is uptake in the market, and the manufacturing, which we haven't really touched on yet either.
Yeah, we'll get to all of it.
All of it, the commercial dream, right?
Yeah. In terms of what gives you guys confidence to pursue non-rare diseases with an AAV gene therapy approach, you touched on having the Bayer backing. Is there anything else from a science or other execution standpoint?
I think it comes down to portfolio strategy. It's just like any other investor. When you're looking, you can take some moonshots, and you can take some things that the pathway is more clear. That's sort of the way we think about common and pathway versus the rare. It happens that our two common diseases are at the forefront right now. The idea is to look at the portfolio, I think, as a whole.
One point I'd add, I think what's interesting, maybe a common theme that at least I've heard is on the theme of dose. Rick described the capsid he's using could yield a lower dose. I think AskBio, you're using an intracoronary approach, which should yield a lower dose. Our thesis at Lexeo has always been treat the disease of interest, but do so at the lowest possible doses. That's an important theme because safety in gene therapy has always been linked to dose. The higher the dose, the more likely you see safety-related events. There are a set of diseases, obviously, that require high doses. There's a risk-benefit that needs to be considered. There are a range of cardiac diseases that, and these are probably why you see a number of companies working on a set of the same diseases.
There are a number of cardiac diseases that do not require a substantially high dose to treat the disease. Friedreich’s ataxia is one. Arrhythmogenic cardiomyopathy, you can get there probably in the E13 per kilogram. There's probably some others out there. I think this idea that you can address these important diseases, but do so at safe doses is another important theme for cardiac gene therapy.
I think that's such a great point. I think it also comes down to delivery. I mean, for us, we really believe in local delivery in order to keep those dose levels down. To date, in our heart failure program, we have not had an immunosuppression regime that we have introduced. The other piece of it, which I know we'll talk about later, is again the COGS and the CMC and that technology. I think it's a great point.
Yeah. You talked about dose as it relates to safety. Obviously, as you mentioned, and as probably I mentioned earlier, there's been some safety signals in the space, Dan in elevitus, a NextGen capsid, safety signals. The read across from these different programs varies dramatically. What are some of the additional steps that you can take to mitigate some of the risks across that spectrum from the rare to the not so rare to the prevalent indications to get people to feel comfortable?
I would like to.
I mean, Rick, you can start.
Sure. We developed new capsids exactly for this reason. I think I'm perhaps in a bit of a unique situation here by able to say that. It's worth remembering these safety events were not foreseen. Behind every news article that we read, there's a patient out there that got injured and a sponsor that had to work through that crisis. We always feel super sad about having to deal with those news, even if we're not intimately involved. I think in many of these cases, they are dose-related. Our thesis has always been, when we develop new capsids, get the dose as low as possible. As I mentioned, we're north of 10x and lower on this.
In other instances too, when you try and analyze with just the public information that might be available out there, beyond the dose and the capsid and the product design, there are also disease-specific circumstances or patient-specific circumstances that might be at play. The benefit risk of that patient community and that disease is also an additional factor to consider as well. There are a couple of things that we are doing beyond the new capsid that I mentioned. We have a proprietary plasmid rearrangement system that we apply to all of our products. What this does is it gets the final product to an incredibly high purity level. One of the items that has certainly been suspect in some of these adverse events is the purity of the product.
The way we designed this proprietary plasmid rearrangement system is to get our % of full capsids in the final product north of 90%. That's at an extremely low cost of goods sold as well. That's another factor that we take into account when we design the product with the capsid, the gene construct, and also the CMC characteristics as well. As many of you know, in some instances, the suspect has been perhaps the immunosuppressant regimen as opposed to the gene therapy product. When we design our clinical trial, the immunosuppressant regimen that we are looking at, of course, a lot driven by the capsid and the preclinical data that we have, we're in more than 50 non-human primates. Even without the use of a single immunosuppressant agent in many of these NHPs, we have seen no transaminase excursions for ALT, AST, no evidence of complement activation.
We feel much more comfortable by not having to explore additional measures for immunosuppressant. We're planning on using something that is tried and true, not only in the clinic, but also in the real commercial world for gene therapies that are out there. Beyond that, obviously, is just realizing extremely close vigilance and working with sites that are well-trained to intervene in the event that an untoward event were to happen, that there's a practice in place where labs are turned around very quickly and physicians and clinicians and the DSMB is able to intervene appropriately, other things that we keep in mind as well.
Great. Tracy.
I mean, we think that safety is an utmost priority. We really think the local delivery, again, I think this could be called the low-dose panel because I think we're all just saying low dose. Low dose, and again, we think the local delivery is really important in that and our ability to avoid immunosuppression. The other thing that you touched on was about, Rick, was about the patient pool, who qualifies for the trial. I think it's funny. I was at Spark when Luxturna was approved. I just remember the pressure that we felt as a company as the first U.S. approval of getting it right for the field. It feels like we're there when there's a negative, even though there's so many positives. When there's a negative, everybody points to the field and it's not safe.
Each trial feels like there's pressure on everyone to get it right and to move the field forward. I think about that. A lot has to do with the selection criteria of patients. As I was talking about before, enrolling large clinical trials requires a lot of patience. You want to do it quickly. That's money. It's slower to get to patients. If you make a mistake there, if you include somebody or a group or class of people that maybe were on the edge, clearly you lose time on the program, but it affects the field. I just think that's a really tricky thing to figure out strategically for a company.
Yeah, Nolan, anything to add?
Nothing critical to add. I do think that we're beginning to move beyond or understand some of the clinical safety events a lot better in gene therapy. I think we know they're related to dose. I think we know a lot of them are related to immunosuppression. Our knowledge there is increasing. The thing we don't know is, to date, there's been a single successful gene therapy commercial launch. The question I think we should all be asking ourselves is, what do we need to do in order to prepare the commercial setting for successful gene therapy commercial launches? It's one thing to have successful clinical data to get accelerated approved or full approved, but it's another thing to convert that science into generating compelling revenues and profits.
I think this is probably what the investment community wants to see from the gene therapy field next, a string of successful commercial launches in addition to some of the compelling clinical data we're beginning to show. I actually think the cardiac disease area broadly is well-suited for this at the moment. We're seeing the introduction of gene silencers in the cardiac disease. We're seeing other genetic medicines, ASOs, and so on being introduced into that field. I think the cardiovascular treatment landscape is ready for the introduction of gene therapy. I think we have an opportunity to maybe change the paradigm with respect to successful commercial launches across the gene therapy field.
Got it.
I was just going to say, I just think CMC, which Rick Modi was talking about, affects that commercialization so much. Is that where you're going? Am I right?
Yes, I was just going to say you go.
No, I'm sorry.
You're there. Yeah. CMC and COGS, how are you thinking about that? Say what you were going to say.
I mean, for us, it's like paramount. When we think about what success can look like, it is about safety. It is about safety. You need high quality, but it is also about the low dose. I just think it's absolutely critical. We've seen so much improvement, I think, at least for AAV manufacturing. We've seen so much improvement. We've used recently too, I mean, to use ViralGen, which is our wholly owned sub. We use ViralGen, and they have a new process that's looking like it's threefold better than what we were using before. Doing something like that is going to make a huge impact on large-scale programs. It might not affect as much some smaller disease populations. As you're scaling, those differences, they're really significant when they compound. We're really excited about that.
I also think when you think about it, commercial success is also about indications and choosing indications that have a high need. I think that the commercial manufacturing is going to open up more diseases that were maybe borderline in terms of, are you going to be, are they going to be successful commercially to now pushing it to the other side? I don't know what you guys think about that.
Maybe if I start with the manufacturing and the CMC side first. Sometimes I get pushed a lot about why are you not in the clinic yet? The company's been around four years plus now. We invested a significant amount of time working on the delivery, but also on the CMC solutions as well. This proprietary plasmid system that we have now gets the yield up not only for our gene therapy product, but anybody's gene therapy product 10 times. In addition, gets the % pool up four times. Those critical quality and yield characteristics can help the entire field forward. I will not throw a number out for cost of goods sold, but I'll come close to it. Our manufacturing was done by Forge. We selected Forge, like many others, doing an assessment of all the different CDMOs out there. This data could be reproduced by any other CDMO.
Our GMP manufacturing run at the 50-liter scale for our clinical trial has generated enough product to dose more than 150 patients. 150 patients. That is after we set aside product for analytics and drug stability. For us, the cost of goods sold now is in the realm of biologics and maybe even lower compared to some biologics. Scale-up is not even an issue. Cost of goods sold for prevalent disease is no longer an issue. We're happy we did that. This type of a solution, I don't think it's something a CDMO will go and advertise because it's not in their best interest to lower the number of runs they do and the lower the number of volume that they do. Certainly, for big pharma and biotech, we believe this could actually allow the field to move significantly forward. I'll pause there, at least on the CMC side.
We can approach commercialization in a bit.
Nolan, did you have any thoughts on the CMC side and how you guys approached it?
The very impressive yields it sounds like Afinia Therapeutics is achieving. We have an SF9 platform. We're achieving yields we're very happy with, also getting close to the cost of goods of biologics. I think this former reputation that the gene therapy field had of being very capital-intensive because of CMC is slowly, or maybe not that slowly, being a factor that's no longer the case. If we've addressed the issue of being capital-intensive, if we address the unpredictable safety issues in the clinical trials, the only one that's left is just to demonstrate true commercial success. This is about payers and pricing and uptake of therapies and those sorts of things. I think that's where the field needs to focus now because that's, I think, what the investment community needs to see. I think all the building blocks for that are there.
An understanding of clinical profile, efficacy, endpoints, regulatory path, that's becoming clear. Safety is becoming more clear. Dose and immunosuppression and the manufacturing, as you're hearing here, is being addressed. I think there's one piece left of the puzzle. Once that's achieved, I think this is a modality that has a lot of potential, not only for rare diseases, but also for a range of other diseases.
On the commercialization side, what kind of implementation are we seeing in terms of precision medicine within the cardiovascular space that give you confidence here?
I'll say just for us, the cardiologists did not have routine access to genetic testing until the introduction of the amyloid therapies. With the introduction of those therapies and likely the HCM drugs like aficampten, mavacamten, I think we'll see a progressive utilization of genetic testing within the cardiovascular treatment landscape. This will yield an understanding of the genetics that are driving a lot of cardiovascular diseases. I think there will be a finding that a lot of them are genetically driven. You'd want a precision therapy to treat those diseases versus using a broad-based HCM small molecule to treat all forms of HCM, whether they're genetic or not. I think that will yield an understanding of what genetically driven precision diseases exist, and then the precision therapies to treat them will need to emerge. The companies here are developing those, and there are several others.
I think we'll see sort of an explosion in the introduction of precision medicines in the cardiovascular field that will look a lot like oncology, where it's pretty much all precision medicine. I think cardiac, if you play it for 10 years, you'll see the field will look a lot like oncology.
Great. I wanted to take a step back, actually. It's been a kind of volatile year, I'd say. The earlier part of the year was a bit challenging. Now sentiment seems to be improving. Momentum is picking up from what we've heard in other panels and what we've heard from investors. Why do you think the perceived headwinds might be behind us? Why is now a good time to get into this space? Nolan?
I think it's your turn to go first.
Oh, my turn to go first.
Just kidding.
It was interesting. I was just at, as many of you all were, I'm sure, just at Meeting on the Mesa a couple of weeks ago. Thankfully, it was not 114 degrees. I would say that the ranks of the people that were there were probably a little more slender. I think that there were some companies that weren't attending for one reason or another. The ones that were there, they are making progress. This is my general takeaway. They were making progress towards clinical goals, and they have funding to get there. I think we just saw UniQure and their HD. If they actually get this accelerated approval based on phase 1/2 data and their data supports it and they can get an approval, that's going to be a game changer.
If these other companies that have funding and can push themselves into the clinical data and that reads out, that's also going to be a game changer. I think a couple of years ago, we were looking at, well, do we have people were very broad. It was not yet. People were saying, we're going to be getting an IND soon. Now we're getting real clinical feedback on AAV as a modality. I think we are excited at AskBio and at Bayer. We are excited about AAV being the right modality for certain diseases. It's not it for everything. Gene therapy, even beyond AAV, gene editing, non-viral delivery, that will be the right approach for certain diseases. I'm really excited about the clinical readouts that we're going to see and that companies are in there and really focusing to get that through.
Gula, I would add, I think we're already there. Unfortunately, human nature focuses more on the bad news sometimes. I think one of my colleagues mentioned that. If you look underneath the truth, there's much more positive momentum, both with some of the comments we made, but also in real life. I think the bulk of the excesses that were there in the pandemic years are behind us. Pipelines have been culled. Some companies, unfortunately, got washed out. It's OK. It happens. I believe we're on the other side of it. Valuations also have been reset. I think the bubble that was there before is now a little bit burst, but for the better.
If I just look at pure AAV public companies, where price transparency is much more obvious, in the last year to date and more recent months, not only has the XBI and NBI outperformed the S&P 500, but the pure AAV public companies have actually outperformed even the biotech sector by not just a little bit, by a lot. Where were we when we were looking at investment opportunities? Get on now because I think the valuations are great. The momentum is good. The decks are nicely loaded for more approvals coming.
Nolan?
Yeah. Similar idea. I mean, I look at it in almost innovation cycles. You see a set of the earliest gene therapy companies focused on opportunities that were more obvious, liver-mediated diseases like hemophilia, motor neurons like SMA, and so on. Those are lower-hanging fruit for gene therapies. There was a wave of companies that were effectively launched at that time on the back of that clinical success. We were one of them. There's a range of others, Tesha, Neurogene. I mean, look at these. Those companies are now reaching a stage of clinical maturity. These therapies are actually becoming drugs that are moving into pivotal studies. We're now in the next wave of the innovation cycle in gene therapy, where we should see real products, the next wave of real products coming out of the gene therapy field.
The question will be, can you take a Huntington's disease gene therapy and make it into a blockbuster commercial success? I think one would hope that the companies that have been focused on clinical development can pivot to become and eventually drive that type of commercial success. You may also see the pharma companies that said they were coming out of gene therapy actually re-emerge to come back into it once they see products that actually fundamentally impact diseases in large markets with a lot of commercial potential. I think there's an innovation cycle concept that's developing now. Why is now the time to get in? The innovation cycle is now reaching its peak once again, as it did back a couple of years ago with, sorry, with AveXis and Spark and so on. We'll see that in the next year or two.
That's a great point. I guess just in terms of the regulatory environment, I know you talked about this in the beginning. You had interactions with the FDA. How does that fit into the current sentiment and what folks are looking at in the space?
I think the concern earlier in the year that the change in FDA leadership will ultimately result in less flexibility is unfounded. I think the reality is you're seeing a consistent theme across all of the companies that are reporting their interactions with the FDA of continued flexibility for the field in rare diseases. I don't think we're in any worse position than we were a year ago with respect to the regulatory landscape.
Great. Tracy, as someone in the non-rare disease space, what is your take?
I think, again, if we can show the data to support our endpoints, then whatever the buzz is, whoever's in charge, if you have the hard data that supports appropriate endpoints with the right sample size of people, we should be able to get there.
That's encouraging. Rick, any closing thoughts?
It's a good time to be in gene therapy. The technologies that are coming out are just groundbreaking, I would say. I know we've been at this panel before. As you just listened, I think, to the optimism here, I hope you walk away with that point.
Fantastic. All right. I think that brings us to the end of the session. Thank you all. That was great.
Thank you.