Audentes Therapeutics' (BOLD) CEO Matt Patterson on Q4 2017 Results - Earnings Call Transcript

Audentes Therapeutics Inc. (NASDAQ:BOLD) Q4 2017 Earnings Conference Call March 8, 2018 4:30 PM ET

Executives

Andrew Chang – Director of Investor Relations

Matt Patterson – President and Chief Executive Officer

Suyash Prasad – Senior Vice President and Chief Medical Officer

Tom Soloway – Senior Vice President and Chief Financial Officer

Analysts

Ying Huang – Bank of America

Ritu Baral – Cowen

Dae Gon Ha – Leerink Partners

Raju Prasad – William Blair

Matthew Luchini – BMO Capital

Ren Benjamin – Raymond James

Difei Yang – Mizuho Securities

Operator

Good afternoon, ladies and gentlemen, and welcome to the Audentes Therapeutics’ Fourth Quarter and Full Year 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the call over to Andrew Chang, Director of Investor Relations at Audentes. Please go ahead.

Andrew Chang

Thank you, operator, and good afternoon, everyone. Just after market close today, we issued a press release with earnings and operating results for the fourth quarter and full year 2017. The press release and live webcast access are available on the Investors and Media section of the Audentes website at www.audentestx.com.

Joining me on the call today are Matt Patterson, President and Chief Executive Officer; Dr. Suyash Prasad, Senior Vice President and Chief Medical Officer; Natalie Holles, Senior Vice President and Chief Operating Officer; and Tom Soloway, Senior Vice President and Chief Financial Officer.

Before we begin with prepared comments from our team, I would like to remind callers that the information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that the Company’s management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the Company’s business.

These forward-looking statements are qualified in their entirety by the cautionary statements contained in today’s press release and the Company’s SEC filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 8, 2018. Audentes undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of today’s call except as required by law.

I would now like to turn the call over to Matt Patterson, President and Chief Executive Officer. Matt?

Matt Patterson

Thanks, Andrew, and good afternoon, everyone. Appreciate you joining our conference call today. I’d like to open our call with a brief overview of Audentes and then provide an update on the great progress we’ve made over the course of the last 12 months. I’ll then ask Suyash to review our pipeline programs, before turning it over to Tom for an update on our financial results. Finally, I’ll provide an overview and highlights for the important milestones we look forward to in 2018.

As a continued reminder, I’d like to open by welcoming those of you who are new to our story and to provide a brief overview of Audentes, a clinical-stage biotechnology company focused on developing innovative gene therapy products to transform the lives of patients living with serious, life-threatening rare diseases. We have developed internal expertise in AAV product design, clinical and regulatory development, and robust, large-scale GMP manufacturing, and currently have four product candidates in development.

A common thread among our pipeline programs is that all indications we are working on are monogenic diseases with high unmet medical need and limited or no treatment options. And for multiple reasons, we believe our programs have an increased chance of success and the potential for shorter-than-average development timelines.

2017 was a truly transformational year for Audentes highlighted by the dosing of the first patient in our lead program for X-Linked Myotubular Myopathy or XLMTM. We’ve also achieved many significant milestones across our portfolio of gene therapy programs including the work that enabled the dosing of the first patient in our Crigler-Najjar program earlier this year and progress towards IND filings in our CPVT and Pompe programs that we plan to file over the next several months. Finally, we strengthen the balance sheet with more than $300 million in two financings over the last 12 months. And as a result, we’re well positioned to deliver on the important commitments we’ve made to both patients and shareholders.

We were particularly pleased to be able to share – recently share the positive interim data from the first cohort of patients in ASPIRO, a Phase 1/2 clinical study of AT132 our product candidate for the treatment of XLMTM. We saw significant improvement in neuromuscular function as assessed by the CHOP INTEND scoring system. And importantly patient one achieved multiple first year developmental milestones within 12 weeks of AT132 administration. All treated patients showed significant improvement in respiratory function as measured by maximal inspiratory pressure at their four-week assessments, but patient one going on to show further improvement at week 12 reaching the threshold of the range seen in healthy children at this more recent time point.

Beyond the functional measures all patients have reported progressive qualitative improvements in disease severity, contributing to the overall positive early efficacy profile of AT132. From a safety perspective, the adverse events we’ve seen to-date have all been well controlled with appropriate medication and supportive care and all patients are stable and continuing assessments per protocol.

In our Crigler-Najjar program, we were pleased to recently announce that we dose the first patient in VALENS, the Phase 1/2 clinical study of our product candidate AT342. As a reminder, the preliminary data from LUSTRO the prospective natural history run-in study has been highly informative, demonstrating that even with up to 14 hours of phototherapy per day, Crigler-Najjar patients live with chronically high and in some cases, dangerous levels of serum bilirubin. These preliminary data from LUSTRO highlight that persistent phototherapy does not adequately address the serious unmet need for Crigler-Najjar patients. In just a few minutes, I’ll ask Suyash to provide an update on both our ASPIRO and VALENS clinical plans.

With regard to our product candidate AT307 for the treatment of Catecholaminergic Polymorphic Ventricular Tachycardia, or CPVT, the IND filing remains on track for the first quarter 2018. Due to the nature of the disease, we have always envisioned the CASQ2, CPVT would be a largely underdiagnosed condition. As such we have recently initiated activities to verify literature estimates of incidence and prevalence and to further characterize the disease burden and unmet medical need for patients living with CPVT.

Finally, we have made substantial progress in our Pompe program. Just last month we announced the results of a comprehensive construct selection study in the Pompe mouse model, evaluating AAV8 and AAV9 vectors at multiple doses utilizing a broad battery of biochemical and immunological assays. We selected our clinical candidate AT982 because of its potential to address the recognized limitations of enzyme replacement therapy, the current standard of care and Pompe disease.

AT982 uses in AAV8 vector capsid, which is known to effectively penetrate skeletal muscle, the heart and the nervous system to deliver a GAA expression cassette containing a novel hybrid promoter to drive GAA expression in tissues relevant to Pompe disease. Expression cassette utilizes the desmin promoter to direct gene expression in muscle and the nervous system and a liver expression enhancer element incorporated with the goal of inducing immune tolerance to GAA protein. We believe that the AAV8 vector capsid coupled with the novel hybrid promoter is a differentiated approach that optimizes the potential of AT982 to deliver long-term and transformative clinical benefit to Pompe patients following a single administration. As a reminder, we hold exclusive global rights to both AAV8 and AAV9 in Pompe disease.

We plan to file an IND for AT982 in mid-2018, which is an update from our previous estimate of second quarter 2018. We do not believe this result in a meaningful change in our overall development timelines and continue to guide the initiation of a Phase 1/2 study in the fourth quarter 2018. We believe that our approach to directly targeting tissues relevant to the disease coupled with our large scale manufacturing capability and in-house neuromuscular disease expertise will further our position as the leading company developing a gene therapy treatment for Pompe and address the recognized limitations of enzyme replacement therapy.

With that overview, I’ll now turn the call over to Dr. Prasad to walk us through the XLMTM and Crigler-Najjar clinical programs in more detail. Suyash?

Suyash Prasad

Thank you, Matt, and good afternoon, everyone. It is a pleasure to speak with you today to provide updates on our XLMTM and Crigler-Najjar clinical programs. Before I do so, I’ll begin by providing a few high-level thoughts on both XLMTM and Crigler-Najjar Syndrome and why we continued to be excited about the prospects of both as promising targets for AAV gene therapy.

XLMTM is a rare, devastating congenital muscle disease with an estimated incidence of 1 in 50,000 male births. Infants with XLMTM are typically born with severe muscle weakness, and the majority require chronic mechanical ventilation from birth. Approximately 50% of patients don’t live to celebrate their second birthday, and those that do are severely limited in their respiratory and neuromuscular function and development. Unfortunately, there is no approved therapy for XLMTM.

The disease is caused on mutations in the MTM1 gene, which encodes a protein called myotubularin. Myotubularin is an enzyme involved in the development and function of skeletal muscle cells, and mutations in the MTM1 gene result in production of too little or no functional myotubularin protein. We have designed AT132 to deliver and express the MTM1 gene specifically in muscle tissue.

In preclinical studies in a naturally occurring canine model, protein expression of only 10% to 40% of wild-type levels provided complete and durable recovery of neuromuscular function in dogs treated with AT132. Additional preclinical studies in mice and non-human primates have demonstrated that doses of AT132 that are in line with our clinical doses achieved MTM1 expression levels at and well above this range. As we think about the implications of this with development of AT132, we believe AT132 has the potential to provide long-term clinical benefit to XLMTM patients through persistent expression of the functional protein following a single intravenous administration.

With respect to the clinical development of AT132, we have taken a robust approach to the design of the program in order to facilitate its rapid advancement. We initiated the AT132 program with RECENSUS, a medical chart review designed to characterize the disease and medical management of XLMTM, and INCEPTUS a prospective natural history run-in study in patients with XLMTM. Data collection in these studies confirm and expand upon the significant burden of disease experienced by patients and families living with XLMTM, and together these studies strengthen our clinical dataset by providing a retrospective historical control and a prospective longitudinal baseline and within patient control for ASPIRO, the ongoing Phase 1/2 clinical study of AT132.

And Matt already noted, earlier this year we reported positive interim data from the first cohort of patients dosed in ASPIRO, which included three patients that received AT132 at a dose of 1 x 10 to the 14 vector genomes per kilogram and one delayed treatment of control patient. While we will not provide the next interim data update until May, I’m pleased to say that we are encouraged by the progress of the first three patients dosed. Both in terms of the efficacy and safety outcomes, we have observed post the December 21, 2017 data cutoff date.

Based on the early yet encouraging profile of AT132, we recommended to the DMC that we enroll an additional three patients of the 1 x 10 to the 14 vector genomes per kilogram dose, which we expect to occur in the coming weeks. We’ve also decided to extend the duration of the prophylactic steroid cover for all patients and have revised approached going to include 1 milligram per kilogram per day of all prednisolone the first eight weeks first dosing with a winning period during weeks 9 through 16.

As many of you know, we’ve committed to providing an interim data updated from ASPIRO during the second quarter of this year and we are targeting the American Society of Gene and Cell Therapy or ASGCT conference being held in Chicago in mid-May. By that time, we plan to show results from the six months assessment from patient one or early dose patients.

All the time I would touch the ASGCT cutoff, we’re also targeting the ability to share up to six-month data on patients two and three as well as for patients four the late treatment control. We also plan to share data we’ve collected from additional patients dosed in the first cohort. But also we’re able to share in patients five through seven will be dictated by treatment diets that are yet to occur. And as a reminder, we will not have biopsy data as part of this interim data update. Finally, and importantly we want to thank the XLMTM patients and medical communities for the high level ongoing support for ASPIRO.

I would now like to turn to our second clinical program AT342 for the treatment of Crigler-Najjar Syndrome. Crigler-Najjar is a rare congenital liver disease characterized by severely high levels of unconjugated bilirubin in the blood, which has the potential of crossing the blood-brain barrier and causing irreversible neurological damage and death. There are no currently approved therapeutic interventions available for Crigler-Najjar patients. The current standard of care requires most patients to spend a more of 10 to 12 hours per day under phototherapy lights, which significantly impacts quality of life for these patients, families and caregivers, and, as we’ll discuss in a moment, does not adequately reduce bilirubin to levels considered to be safe.

Crigler-Najjar is caused by mutation in the UGT1A1 gene, which encodes an enzyme, UGT, that converts lipid-soluble bilirubin to a water-soluble form that can be excreted from the body. We have designed AT342 deliver and express the UGT1A1 gene specifically in the liver utilizing the AAV8 vector, to which we hold global exclusive rights for the treatments of Crigler-Najjar.

AT342 has generated durable, dose-responsive and clinically relevant decreases in total bilirubin levels in a mouse model of the disease, with no significant treatment-related adverse events or safety findings. Additionally, previously published work with an AT342 prototype and the knockout mouse showed that enzyme expression levels at only 5% to 8% of wild-type maintained serum bilirubin levels within normal range for the entire 17-month duration of the study.

Based on this preclinical work, we believe that AT342 has the potential to provide long-term clinical benefit to Crigler-Najjar patients through the persistent expression of the functional protein from a single intravenous administration.

As with XLMTM, we have designed a robust clinical program for AT342 in Crigler-Najjar to facilitate its rapid advancement. The clinical development program for AT342 with LUSTRO, a prospective natural history run-in study designed to characterize the disease course and burden of illness, patients with Crigler-Najjar, and to serve as a longitudinal baseline and within patient control for VALENS, the Phase 1/2 study of AT342.

As we reported late last year, data from LUSTRO highlight the risks posed by elevated bilirubin levels in Crigler-Najjar patients. The LUSTRO data also confirm the significant disease burden on patients and families that must configure their lives to ensure rigorous adherence to phototherapy of up to 12 or more hours per day.

With respect to VALENS, we plan to enroll 12 patients, the majority of whom we expect to rollover with LUSTRO, although this is not a requirement. We plan to enroll three ascending dose cohorts of 1.5 x 10 to the 12, 6 x 10 to the 12 and 1.5 x 10 to the 13 vector genomes per kilogram. Each cohorts include three treated patients and one delayed-treatment control, who will receive AT342 once the full dose is chosen.

All patients are treated with oral prednisolone at 1 milligram per kilogram per day for the first eight weeks post treatments and then weaning down over weeks 9 through 16. Additionally, all patients remain on the normal prescribed phototherapy dose from weeks one through 12, weaning off phototherapy of weeks 13 through 17.

As Matt mentioned, we’re pleased to announce that we dose the first patient with VALENS last month. We’re grateful to the many years of tallest work by obtain scientific and medical community and Crigler-Najjar patients and families as allowed us to achieve this important milestone.

While we are still early in the study, I’m pleased to tell you that we are encouraged by the progress of the first patient dosed, including the fact that we have not observed any safety signals thus far, since treatment nearly a month ago. We look forward to providing interim data from a VALENS study, which we are targeting for the European Society for Pediatric Gastroenterology, Hepatology, and Nutrition or Asperger conference being held in Geneva in mid-May.

With that overview, I’ll now turn the call over to Tom to provide an update on our financial results. Tom?

Tom Soloway

Great, and thank you very much, Suyash. We have summarized our year-end 2017 financial results in the press release that we made available after the market close today.

Importantly, we ended 2017 with approximately $133.6 million in cash, cash equivalents and short-term investments. In January 2018, we further strengthened the balance sheet with a follow-on offering that resulted in aggregate net proceeds of approximately $217.2 million. These funds are expected to last into the second half of 2020.

Research and development expenses were $21.7 million for the fourth quarter of 2017 and $75.9 million for the year ended December 31, 2017, compared to $16.6 million and $48.8 million, respectively, for the same periods in 2016. The increase in research and development expenses was primarily attributable to an increase in research and development headcount and related facility costs, increased internal manufacturing costs, an increase in preclinical and clinical study costs for our development programs, and an increase in expenses related to expanded internal research activities.

General and administrative expenses were $5.2 million for the fourth quarter of 2017 and $17.3 million for the year ended December 31, 2017, compared to $3.2 million and $11.3 million, respectively, for the same periods in 2016. The increase in G&A expenses was primarily attributable to increased general and administrative headcount and related facility costs, increased professional service and audit fees, and higher insurance costs.

Net loss was $24.4 million in the fourth quarter of 2017 and $90.2 million for the year ended December 31, 2017, compared to $19.7 million and $59.7 million, respectively, for the same periods in 2016.

I would also like to call out that during the fourth quarter, we recognized a $2.2 million tax benefit, resulting in a decrease in our net loss. This benefit was due to recent changes enacted in the comprehensive tax reform bill and led to a reduction in our deferred tax liability related to our acquisition of Cardiogen Sciences in 2015. And finally, as of March 5, 2018, we had 36.7 million shares outstanding and 4.9 million outstanding options.

And with that overview, I’d like to turn the call back over to Matt for a few final thoughts.

Matt Patterson

Thanks, Tom. Just before opening the call for questions, I’d like to highlight and reemphasize a few of the important upcoming 2018 milestones for Audentes. As Suyash mentioned, we plan an additional interim data update for ASPIRO at the ASGCT conference in mid-May, we are targeting results from the six month assessments for the first four patients, as well as any available data on the next three patients we expect to treat shortly.

In our Crigler-Najjar program, we look forward to completing enrollment in the first dose cohorts for VALENS and also the sharing preliminary data during the ESPGHAN conference also in mid-May. We remain on track to file an IND in our CPVT program here in the first quarter 2018, and to initiate a Phase 1/2 clinical trial in the fourth quarter. And finally for Pompe, we’re making excellent progress on IND enabling preclinical work and plan to file an IND in mid-2018 and remain on track to initiate the Phase 1/2 clinical study in the fourth quarter.

Our recent follow-on offering creates a strong foundation from which we can focus on execution and driving value across our pipeline, we’re excited by the multiple 2018 milestones and look forward to sharing these updates with you as their work progresses.

That concludes our prepared comments for today’s call. Operator, you may now open the line for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question is from Ying Huang from Bank of America. Your line is now open.

Ying Huang

Hi, thanks for taking my questions. Maybe just has a couple of quick question. First is on, XLMTM program, so you mentioned that you may think about either lower dose or maybe you maintain same dose for the patient enrollment. Have you guys decided yet and or if not would you decide pending more patient data. And then secondly on Crigler-Najjar, I know you said that in press release, there’s no safety signal. Can you confirm that there’s no elevation of enzyme or any other immune responses. Thank you.

Matt Patterson

Sure. Thanks, Ying. Hi, and thanks for the question. So just to be clear on MTM, there is no plan to lower the dose, which you seem to suggest in your question. So I’d want to make sure we put that said. And then as far as next steps as we’ve described, we’re really – extremely pleased with the early efficacy profile at the 1 x 10 to the 14 dose and as a result I’ve chosen to enroll three more patients at that same dose. What this also affords us is the opportunity to get more data meaning six-month data in the first few patients treated, including their biopsies before we choose next steps for dosing.

So to be clear, we do expect still to escalate the dose, but we will choose what does to go to based on the totality of information from six-month data in the first three patients and the additional data we get in the next three patients. Including in those biopsies in particular, evidence of protein expression and based on the levels we observed there in combination with all efficacy and safety data, we’ll make a decision on what dose to escalate to.

In the big picture, we’re less convinced now that we may need to go as high as the 3 x 10 to the 14 or 5 x 10 to the 14 doses that we originally envisioned in the protocol. So that’s our plan going forward. As Suyash mentioned, we won’t have the biopsy data at the time of ASGCT, we expect to have six-month data, but won’t have time to get those biopsies processed and shared. So what ASGCT, we do not expect to be able to share our plans for next dose cohort. But we certainly will plan to share that information rapidly thereafter as soon as we have the analysis complete.

That was the MTM question, sorry, the Crigler, yes, while we don’t plan to go into any data review today. It’s safe to say that when we say no safety signals observed that includes any evidence of liver enzyme elevations.

Ying Huang

Thank you.

Matt Patterson

Okay, thanks.

Operator

Thank you. Our next question is from David Nierengarten from Wedbush Securities. Your line is now open.

Unidentified Analyst

Hi, this is Jeff in for David. Thanks for taking my question. We’re wondering for the AT307 study, what would – I know you’re doing some of this work right now. What was the typical ages of the patients be that you see for that trial.

Matt Patterson

So it’s a fairly broad spectrum, maybe I’ll ask Suyash what is typical for a presentation in that community and at least at the high level or vision for the clinical protocol, with the caveat that like I said, we’re still characterizing the population further. So we haven’t finalized exactly what we think would be most appropriate in the end, but Suyash, maybe your perspective.

Suyash Prasad

Sure. From the perspective of age of presentation, most individuals with CASQ2-CPVT present between around the ages with 7 to 12 years of age. As this often, as you would understand with this disease of sudden death unfortunately sometimes the presentation results in death. But when you speaks to clinicians and literature suggest age of presentation is usually 7 to 12 years. And then the instant and the prevalent population is generally teenagers, young to middle aged adults.

Unidentified Analyst

Okay, thank you. And would you have any concerns if you were the dose younger kids about when they present at any physiological changes my effective therapies activity.

Matt Patterson

No, I think we would – I think when we’re thinking about the design of the clinical trial, we’re actually going to include children in the study. As I said they used to present around 7, 8, 9 – 7 to 13 years of age. And given the unmet need in these children and we would be quite comfortable dosing. Just to remind you in the MTM study with dosing from zero up to four years of age and Crigler-Najjar study, the lower age limit is one year of age. So we don’t anticipate that being any major developmental considerations. Of course, the dose we gave is wide based. So we give a dose with drug that is specific tail to the kilogram way to the trial.

Unidentified Analyst

Okay, good. Thanks for taking the questions.

Operator

Thank you. Our next question is from Ritu Baral from Cowen. Your line is now open.

Ritu Baral

Hi, everyone. Thanks for taking the question. On the AT132 ASPIRO trial, the three new patients that you’re going to be enrolling, have you identify them already. Do you know what the baseline ages or deserve like a spread of ages that you’re looking to enroll to help better interrogate the clinical benefit that might be shown.

Matt Patterson

Hi, Ritu. Patients have been identified, in fact, patients are scheduled. And so as we mentioned in the script, we’re optimistic that those next few patients will be enrolled here in the coming weeks. As a result, we do have some of those baseline – that some of that baseline information, but I think would be best if we defer the specifics of that until our next data update, obviously confirming at that point to that they did go on to receive treatment as expected.

As far as the range of ages being evaluated as we’ve – as you’ve heard us talk about before due to the specific biology of MTM, we’ve always had confidence that you could treat a patient, who’s been living with disease for a number of years are still produce a meaningful therapeutic benefit and when you look at the data from cohort 1. We see just that – we see benefit in both on a lower end of the age spectrum, down to our nine month old patient one and all the way up to four years of age in patient two. So we remain optimistic that that continue to enroll patients across that spectrum. We’ll help to produce a positive data, but of course it’s something to be learned as we go forward here. But we will be happy to share those demographic and the baseline information of those next two patients at the next update.

Ritu Baral

So you don’t feel that it’s harder to show benefit at above a certain age or in younger patients, who may have sort of spontaneously reached milestones. There’s no sweet spot.

Matt Patterson

No, like I said I think we are optimistic and we’re obviously enrolling zero to five, but based on the body of pre-clinical data including when we treated animals’ later stage in the disease and still showed very powerful clinical benefit. Again back to the biology of the disease because it’s a congenital myopathy and not a severe dystrophy and that’s doesn’t suffer the same degree of inflammation and scarring and occasionally irreversible damage that you see in other dystrophies. We are optimistic that we can produce very meaningful benefit even in those kids that are a little bit older. Now it may end up taking a little longer to get to that powerful outcome than maybe in a younger kid, but overall we still expect to produce benefit across the age ranges.

Ritu Baral

Got it. And then on your upcoming six month biopsy data is there a certain level of protein expression that you’re looking for to make sort of a go, no go decision on either dose escalation or high dose, whether it would be needed a high dose or not?

Matt Patterson

You know the simple answer is not. Yeah, we don’t have a specific number in mind. Of course as you may recall from the dog dosing ranging study and what she does, reiterated in the stock was just 10% to 20% to 40% of normal levels, produced powerful clinical benefit in the dog model. But we don’t have a set number in mind for that. I think our vision is to take in all the information and decide based on a combination of the six month efficacy advocacy data in the first three, a little less efficacy data the next three safety across all six patients treated and those biopsies. We’ll make a decision on what we think is the best next dose to go up to.

Ritu Baral

Got it. Last question on 342 and Crigler-Najjar, you have mentioned the regimen that had one to twelve week stable phototherapy and then the wean between week 13 and 17 are understanding of clinical administration of phototherapy in weaning and the real world is that there has to be a threshold of bilirubin below which they would be willing to – doctors would be willing to try a phototherapy wean. Just your protocol – say that you have to reach a certain level or being reduced a certain level of bilirubin before weaning to even start.

Suyash Prasad

Yeah, hi, Ritu. Yes, you’re absolutely right. The children do need to reach a specific threshold for us to be able to initiate the wean specifically for the balance study if a child drops to below 8 milligrams per deciliter on the gene therapy or they drop the bilirubin level by 50%, then we will initiate the wean. And as mentioned the wean occurs from weeks 13 to week 17, so it’s essentially a five week wean where we drop the phototherapy hours by 20% a weeks. So it’s a gradual wean. So it’s done in a very safe monitored manner.

Ritu Baral

Got it. And I am assuming you would report if any patients work basically failed to reach that threshold. You would report a failure to even enter the weaning stage.

Matt Patterson

Yes, as I say, they need – the bilirubin needs to drop to particular level before we even start the wean, so absolutely.

Ritu Baral

Okay. Great, thanks for taking all questions.

Matt Patterson

Sure.

Operator

Thank you. Our next question is from Joseph Schwartz from Leerink Partners. Your line is now open.

Dae Gon Ha

Hi, guys. Thanks for taking the question. This is Dae Gon dialing in for Joe, so just a couple for me as well. Just going back to Ritu’s question about biopsy and your response on the totality of data to decide on the next dose. I was just wondering can you provide a little more color on maybe your determinant factors for dosing your delayed cohort. I mean given your Cohort 1 data that exceeded internal expectations has that patient been dosed yet or would additionally needs to happen before you can feel more comfortable about that 2014 data. And then I have got a couple of follow up. Thanks.

Matt Patterson

Yeah, we haven’t changed our overall vision for when the delayed treatment control patients would receive drug. The original vision, which remains in place is that we will obtain a six month data including biopsy data in each of the cohorts that we end up evaluating each of the doses we end up evaluating in the study. And once we’ve chosen what we believe to be the optimal dose then we will treat the delayed treatment controls with that dose.

So as it stands right now, the delayed treatment control patient would not receive treatments until we get to a later date and in particular the biopsy data from at least the next cohort that we plan after this one and maybe a third depending on how things progress. So it remains to be seen both what dose will decide to go to in the next cohort and frankly whether you’ll end up needing three dollars cohorts or maybe just two would be adequate to advance the program and decide to treat those patients.

Dae Gon Ha

Understood, thanks. And with regards to the 132, is there a certain critical mass or threshold that you’re waiting on? Can you remind us what the RMAT designation if it has been granted for the 132 program, if not what the critical mass is and when realistically can you engage the regulators for talking next steps?

two is there a certain critical mass or threshold that you’re waiting on and can you remind us what the yeah our math designation if it has been granted for the one thirty two program if not what the critical mass is and when realistically can you gauge the regulators for talking next steps.

Matt Patterson

Yes, so we have not yet obtained RMAT designation. It’s the decision that company makes as to when you feel you have enough information to file for that designation. It is our vision to do so reasonably soon given the exciting early data in the first cohort. As a reminder to everyone of course, RMAT, the Regenerative Medicine Advanced Therapy designation came about with 20% requires specific for gene and cell therapy products and essentially affords us all the same types of benefits that are provided with breakthrough designation that’s been in place for several years.

So we expect to request that in a reasonably short order here and they have a period of time that takes to the review and accept that designation. And of course from you would end up schedule a meeting with the authorities to talk about the program overall and an appropriate path to license yourself. And that’s certainly part of our 2018 as to pursue those designations but it is a bit of a judgment call on when you have the right amount of data to make sure that’s a very efficient process with the agency.

Dae Gon Ha

Okay. And then last question is on the 982 program, so congrats on the selection of a candidate. Going forward, I was just wondering how are you thinking about given the competitive landscape of not only the commercial therapy, but other investigational drugs that are out there. How are you thinking about sort of preliminary trial design? And given the approach could suppress the anti GAA antibody production. How are you thinking about CRIM-negative populations? Do you think they could be addressed with your gene therapy? Thank you.

Matt Patterson

Sure, thanks for the question. We don’t have the final plans just yet on the Pompe clinical program. We certainly appreciate that it’s a different type of development program than say MTM given the existence of ERT and some of the other programs in development. Big picture, we feel as we said in the script very confident in our approach in particular within the approaches in the gene therapy community because of our plan to use a construct that ensures expression of the protein in the tissues that matter in Pompe muscle, nervous system and in the case as you mentioned also including a little bit of liver expression to mitigate potential immunogenicity.

So – but the clinical development program was surely involved studies, that involve patients that are both in the adult end of the spectrum as well as the young children end of the spectrum and including patients who are on ERT and the ideal vision of course being that we could wean them off over time. But also patients’ naïve to ERT, but exactly how we stage those different groups is still a work in progress and a discussion with the regulatory authorities. But it is our vision to develop the drug thoughtfully in a way that we’ll ensure its future availability for the entire Pompe population. And to finish the story that includes the CRIM-negative patients, who of course have the highest medical need in the Pompe community and we certainly envisioned treating those patients as well unlikely the could be a course of standpoint of clinical development, but hopefully we will get to them very soon.

Dae Gon Ha

Awesome, thanks very much.

Matt Patterson

Sure.

Operator

Thank you. Our next question is from Raju Prasad from William Blair. Your line is now open.

Raju Prasad

Thanks for taking the question. Can you just give us some color on the change in the prednisolone protocol in the trials?

Matt Patterson

Sure. I think it’s pretty straightforward, I can start and Suyash can answer, but when you evaluate the data from the first cohort. If you saw anything as we did in patient two with an elevation of liver enzymes and in patient three as well, when he was not receiving the steroid to do his GI infection. Anything that was observed, happen to be observed at the taper, at the late stage taper or without the existence of any steroid cover. So I think our decision was simply to recognize that and extend the cover a bit longer to give the patients an even better chance for a strong efficacy and safety results.

So hopefully, that covers it, Suyash, you have anything to add to that?

Suyash Prasad

No, I think you’ve answered the question absolutely, Matt. And just to reiterate is now eight weeks has gone from four weeks of 1 mg per kg to eight weeks. And then we also taper down the much slower progression. So rather having the taper of four or five weeks and now tapering down over eight weeks. And I think that should hopefully resolve what we saw previously.

Raju Prasad

Okay, and on dose escalation, if you were to choose a dose that was lower than the initially planned 3x10¹⁴ would that require a amendment to a protocol or is there things looking in the IND or you would be okay with going at a lower dose, you think that to be sufficient?

Matt Patterson

Suyash might take that one.

Suyash Prasad

Yes, let me make a comment here, so with that decision will be made, we will look at the data, we look at the totality of the data as Matt has already suggested. And we’ll make a recommendation in the data monitoring committee and if for example, we feel going up to two D14 rather than three 14 is the right thing and the DMC had an agreement. We’ll move forward to doing that, we will need to amend the protocol but I think it’s likely would actually be okay just moving forward without DMC recommendation, we are also waiting for the protocol moment to go through subsequently.

Raju Prasad

Great. And maybe just one last one, can you comment just on a high level on the baseline biopsy you’ve scene in the patients thus far are they in line with the dog data, is there similar variability. Just kind of curious so that when we do see the six months data, will that be pretty clear that it kind of goes along with what you’ve seen in the pre-clinical trial?

Matt Patterson

Raju, first I think we’ll have to defer that one to our future data presentation. Also as a reminder, the biopsies are being looked at for two different general purposes. The first is for evidence of protein expression and support of data from DNA and RNA evaluation. But then also for histologic review, which we believe will be a valuable support of data from an efficacy perspective because as you may recall MTM tissue has a distinct look about it, prior to treatment and in the mouse, in the dog we showed a maturation and improvement in that skeletal muscle.

After treatment so we would hope and expect to see the same thing in human patients but we’re doing that in a very robust blinded manner, where we are taking the samples and putting them aside essentially for the histologic analysis until the very end of the study. And then having them reviewed in a blinded manner by three outside experts and we are in fact going to include a mixture of healthy samples as well to ensure it’s as robust an analysis as possible. But that’s a big picture but unfortunately we don’t have any information to share on the baseline biopsies today.

Raju Prasad

Great, thanks. Maybe just one quick question on the manufacturing information included on the press release, serum-free suspension cell culture, is that more for some of the larger indications like CASQ2-CPVT and Pompe is that how you kind of think of it because I’m assuming that your bioreactor scale is probably enough for some of the rare disease, little more rare disease looking at.

Matt Patterson

Well, the fact that it’s a serum-free suspension culture system is simply something that we strove for and achieved to ensure we have the highest quality manufacturing system. They can ask quality product that was also very scalable. And so that’s certainly contributed obviously to getting to the 500L scale we are at now. And I think as we’ve shared previously our existing capacity 2x500L reactors is enough, we expect to support all of our near-term clinical needs. And as we suggested in the press release, we feel very comfortable that it’s a process that is a viable commercial process as well, which will allow for a seamless transition from early development to commercialization in all the programs.

And then over time as we see the programs, the pipeline development hopefully add programs to the pipeline as well. As you recall we have the ability to significantly expand capacity under – in our existing footprint of the facility. So it’s our intention to do that at the right time. But right now we’re so pleased with our system and productivity that it’s not critical to stay on track with all of our pipeline programs.

Raju Prasad

Great. Thanks for the question.

Operator

Thank you. Our next question is from Matthew Luchini from BMO Capital. Your line is now open.

Matthew Luchini

Hi, great. Thanks for taking the questions. So couple from me, first on the Crigler-Najjar program, can you give us a sense as to where you are in terms of patient identification. For the patients that will be needed to fill out the remaining – at least initial cohort or two. And relatedly recognizing that the protocol or the plan is to start weaning phototherapy at week 13, if a patient were to have a particularly rapid robust response in terms of reduction in bilirubin, is it possible with that phototherapy weaning could start sooner and then I have a quick question on Pompe as well.

Matt Patterson

Sure. Hi, Matthew, so on Crigler we are very confident that we have the patients lined up to continue enrollment per the protocol plan, which includes patients both in the U.S. centers, as well as in Europe. Very shortly will initiate our first European site and enroll patients there as well. So in the near-term very comfortable, in the big picture as we mentioned on a recent call, we’ve been successful in identifying a number of free locations globally upwards of 130 patients identified now but not all-in locations that would be convenient for the clinical trial nor do we know for sure that all those patients will be eligible for the trial. But we’re pleased with that start to identifying a program population both for clinical development but also future commercialization.

And on the weaning, certainly reasonable to think that families in particular might see early results and want to wean off earlier than the protocol suggests. That’s probably human nature in this case but it’s our intention and that of the PI is to strongly encourage families to stick with the protocol and ensure that when we observe a reduction in bilirubin that is durable for that 12 week period before weaning off of phototherapy. So it is our intention to try to encourage people to stick with that plan and but obviously we’ll see how it goes.

Matthew Luchini

Great. Okay, thanks. And on Pompe recognizing you’re still trying to finalize the trial design and what the development plan might looks like. Maybe you could just tell us or give us some sense as to how you are thinking about data communications strategy, do you expect to follow a similar approach to what you’ve done with MTM and you are planning to do with Crigler or do you expect to perhaps hold some of the initial cohorts a little bit longer, follow a different approach?

Matt Patterson

I can obviously say we don’t have a set plan in mind for Pompe, a driving factor for MTM and for Crigler and the time points at which we’ve chosen to share information. It is largely driven by pre-clinical data that shows rapid improvement in the animal models with disease. And therefore it always felt credible to us to share updates after a few months in a few patients treated. So that cadence will undoubtedly continue for MTM and Crigler as we’ve said before. Pompe to be determined, it may be that meaningful updates are spaced out a little bit longer than every three months. But unfortunately, it’s hard to answer today. I think I’d rather finalize the protocol and get the trial started and give you a little more clarity later this year. That being said, we do expect based on starting the trial late this year to have preliminary data from that program in 2019.

Matthew Luchini

Okay, great. Fair enough. Thanks.

Operator

Thank you. Our next question is from Ren Benjamin from Raymond James. Your line is now open.

Ren Benjamin

Hey, guys. Thanks for taking the questions and congratulations on the progress. Can you – Matt, can you talk maybe a little bit about what we can expect from the longer-term follow-up, especially in terms of the CHOP INTEND score in six months? I’m just trying to get a sense, are you hoping that you’ll see a continued improvement in the score, a stabilization? It seems like from INCEPTUS there might be some variation among patients. Are you trying to see that that variation – maybe isn’t happening in the treated patients? Just some sort of color there.

Matt Patterson

Sure. Thanks, Ren. I think certainly where there is room for continued improvement on the scale on any individual patient we’d expect to see continued progress. That being said, as we mentioned when we first shared the data, it’s a scale that totaled up to 64 points. But for reasons that are specific to MTM kids and in particular the fact that they’re often have a tricky ostomy related to their ventilatory support. We believe it’ll be difficult for all patients to max out if you will on the CHOP INTEND. So once they start getting into the 50s or nearing 60, we would probably expect them to kind of flat now at that point and then we would just obviously be monitoring to see that they maintain their benefit over time.

So that’s sort of the story on CHOP INTEND. Of course, as we get out longer, we expect to have more information to share both from other assessments being done in the study, beyond the CHOP INTEND and the maximum inspiratory pressure. Monitoring developmental or milestones, which as we said before, we’re doing on a more of an every 12-week basis, which is why we had it for patient one the first update but not for the others just yet. So, yes, hopefully that helps.

Ren Benjamin

Yes. And just, I think you had mentioned outside of longer the steroid dosing, were there any other protocol modifications that you had instituted in this ongoing study?

Matt Patterson

Sorry, any other protocol modifications?

Ren Benjamin

Yes, in the XLMTM study at least for the next three patients.

Matt Patterson

No, nothing envisioned. Suyash, mentioned, once we choose the next dose that will go to, if in fact it is not 3x10¹⁴, which is what’s currently in the protocol. If it’s something lower than that we would imagine amending the protocol. But as Suyash already said, we don’t envision that slowing enrollment at all, given that we would be bringing down the dose from the original, dosing doesn’t. So no other amendments are planned at this time.

Ren Benjamin

And then just one final one from the Crigler-Najjar study, I guess I’m expecting everyone, maybe two patients worth of data in May. It seems like just from looking at the numbers that it would probably – patients probably wouldn’t be in the weaning off period or maybe they are. So what kind of – should we just be focusing on bilirubin levels? What are sort of the data that we could expect from that presentation?

Matt Patterson

Yes, I think you’re right. It really will be a story. In the first 12 weeks of the protocol it’s really a story of bilirubin and safety. As you know and we’ve established in LUSTRO, these patients all are getting around 12 to 15 hours a day of phototherapy, but their bilirubin levels remain elevated around that low-teens to high-teens milligrams per deciliter. 20 being a level you must stay below which is neurotoxic too or really being normal.

So there’s plenty of room for improved even when they are on phototherapy. And that’s our vision for the first 12 weeks is to enroll the patient. And after treatment observed hopefully bilirubin levels come down and stay down a week 12 in the clinic.

And it’s a first data set. You’re absolutely right, just doing the calendar math. We will be just at about the 12-week time point for patient one when we’re providing with first data update. So he will not have begun the weaning process. And then of course nor will the patients treated there after him as well.

So in the first 12 weeks in this near term it’s a story of showing bilirubin coming down and staying down and what’s the safety profile. And then later in the year our next update will be able to share the results of weaning in those first few patients.

Ren Benjamin

Got it. Then if I can just throw in one last one for the Pompe. Can you just talk a little bit more about the hyper promoter and the limb expression elements? Just give us a little color on how that’s differentiated from other competitors that are out there?

Matt Patterson

Yes. Well, so, as I mentioned just to reiterate, the key promoter that’s in the construct is a version of the desmin promoter. And we’ve demonstrated that produces robust expression of GAA in the tissues that we really care about in Pompe that are most important including muscle and the importantly in various dermal tissues of the nervous system.

In addition, we’ve included this enhancer element, there’s a liver enhancer element that allows for a modest amount of expression in the liver as well, which we’ve shown based on our preclinical work. Helps mitigate any immune response to the GAA protein itself. And so the translation of all that we believe is an optimal profile for safety and efficacy as we’re getting robust expression where you truly would need it and mitigating the immune response. And really those are getting at the key issues that are challenges today for ERT. And frankly, also helps differentiate us from other forms of gene therapy that are being evaluated at least pre-clinical today and envisioned chronic in the future such as liver directed only approaches.

We believe that liver directed approaches may still not achieved the ultimate goal, which is improved pathology and better clinical outcomes in the tissues of Pompe that really matter as I mentioned. So we’re very confident that with that study we’ve got the best construct to go forward and the best chance that optimal safe and efficiency profile for patients.

Ren Benjamin

Great, thanks for taking the question.

Matt Patterson

Sure.

Operator

Thank you. And our next question is from Difei Yang from Mizuho Securities. Your line is now open.

Difei Yang

Hi, good afternoon, and thanks for taking my question. Just a couple quick ones. So how do you think about the safety process for AAV8? Is there a theatrical upper the mid for safety considerations?

Matt Patterson

Thanks for the question. We feel very good about the safety profile of AAV8 when delivered systemically. It has a significant amount of human and animal experience; both in liver indications and of course in our MTM indication in particular neuromuscular disease. As a reminder, we did a robust amount of pre-clinical work evaluating various doses of our product, and in particular in dog – naturally occurring dog model as well as non-human primates.

And specifically in non-human primates we did a toxicology and biodistribution study at a dose of 8x10¹⁴ vector genomes per kilogram, which produces very clean safety results and robust biodistribution and protein expression in the animal. So we feel very good about the safety of AAV8 delivered systemically in patients and our MTM data supports that, and of course we’re using AAV8 in our other programs as well.

Difei Yang

Okay, thank you. And then on the endpoints for MTM programs, have you started discussion with the regulators on CHOP INTEND or MIT can be eventually used as primary endpoints?

Matt Patterson

During pre-IND discussions we had a robust interaction with both U.S. and European authorities, who were all supportive of the battery of test we’re looking at, both in the neuromuscular category as well as the respiratory. We have not had further interactions with the authorities yet about which of those may be best to serve as primary endpoints for approval.

But we envisioned that being part of our discussion hopefully as soon as later this year after achieving as I mentioned earlier in our man designation in the United States, a prime designation in Europe, which will facilitate good discussions with the authorities about next steps.

But in the end we feel like we are looking at all the right assessments. And based on the body of data that we’re developing, we’ll be able to fine tune the analysis in a manner that’s helpful to regulatory authorities and hopefully supportive of other rapid approval for both the MTM and eventually Crigler-Najjar.

Difei Yang

Okay, thank you very much.

Matt Patterson

Sure.

Operator

Thank you. At this time I’m showing no further questions. I would like to turn the call back over to Matt Patterson, President and Chief Executive Officer for closing remarks.

Matt Patterson

Okay. Thanks again everyone for your participation this afternoon. We appreciated the opportunity to share our progress with you and looking forward to providing further updates throughout what promises to be an exciting year. Operator, that concludes our call today. Thanks very much.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may now disconnect.