Applied Genetic Technologies Corporation's (AGTC) CEO Sue Washer on Q4 2021 Results - Earnings Call Transcript

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Applied Genetic Technologies Corporation (NASDAQ:AGTC) Q4 2021 Earnings Conference Call September 24, 2021 4:30 PM ET

Company Participants

Sue Washer - Chief Executive Officer

Jon Lieber - Chief Financial Officer

Stephen Potter - Chief Business Officer

Matt Feinsod - Executive Vice President, Global Clinical Strategy

Conference Call Participants

Matthew Luchini - BMO Capital

Joe Pantginis - H.C. Wainwright

Zegbeh Jallah - ROTH Capital Partners

Yun Zhong - BTIG

Kristen Kluska - Cantor Fitzgerald

Jacques Villefranc - Stifel

Yanan Zhu - Wells Fargo Securities

Operator

Good afternoon and welcome to the AGTC Fourth Quarter and Fiscal Year-End 2021 Financial Results Conference Call. Today’s call is being recorded.

Before we get started, I would like to remind everyone that during this conference call, AGTC may make forward-looking statements, including statements about the company’s financial results, financial guidance, its future business strategies and operations, and its product development and regulatory progress, including statements about its current and planned clinical trials. Actual results could differ materially from those discussed in these forward-looking statements due to a number of important factors, including uncertainty inherent in the clinical development and regulatory process, the extent and duration of the impact of COVID-19 pandemic, and other risks described in the Risk Factors section of AGTC’s most recently filed Annual Report on Form 10-K and other periodic reports filed with the SEC. AGTC undertakes no obligation to update any forward-looking statements after the date of this call.

For introductions and opening remarks, I’d like to turn the call over to Sue Washer, Chief Executive Officer of AGTC. Please go ahead.

Sue Washer

Good afternoon, and thank you all for joining us today. With me on today’s call are Jon Lieber, our Chief Financial Officer; Stephen Potter, our Chief Business Officer; and Matt Feinsod, our Executive Vice President of Global Clinical Strategy. During today’s call, I will review our recent accomplishments, Stephen will review recent business development activities, and Jon will provide an overview of our financial position and then all of us will take your questions.

We’ve had many notable accomplishments during the year and several since our last quarterly call in May, all of which enhance our vision of using our gene therapy expertise to develop groundbreaking therapies for people with rare diseases. In May, we’ve reported positive data from the ongoing XLRP Phase 1/2 clinical trial, including 12-month data from Groups 5 and 6, reflecting a 50% response rate among patients who would meet the inclusion criteria for the Skyline and Vista trials and 24-month data from 2 of 3 Group 4 patients providing preliminary evidence of response durability. Taken together, these data add to the body of evidence suggesting that durable improvements in visual sensitivity and visual acuity maybe achieved in patients receiving AGTC’s XLRP product candidate while continuing to demonstrate a favorable safety profile.

As we said at the time, we believe these data are an important advance for the field of gene therapy for retinitis pigmentosa and we look forward to the presentation of that data at the RD2021 meeting next week by Dr. Paul Yang and at the AAO meeting in November by Dr. Robert Sisk, two of our principal investigators.

We are proceeding with our Skyline and Vista trials. Due to several challenges related to the COVID pandemic, including a greater than 50% patient screening cancellation rate in July and August, we are amending our guidance on the three-month interim data release for Skyline to the first half of 2022, but maintaining our Vista six-month interim data release for fourth quarter of 2022.

We have made several logistical improvements to support patient recruitment, including adding a second mobile vision center to pre-screen, screen and conduct follow-up visits for patients as well as a significant expansion in the number of sites initiating for Vista.

Turning to our programs, developing products to treat achromatopsia, in June, we reported 12-month data from our ongoing Phase 1/2 achromatopsia clinical trials, including data from all adult patients and low-dose Group 4 pediatric patients. For our achromatopsia B3 candidates, results demonstrated biological activity, based on improvements in visual sensitivity in the treated area measured by static perimetry as well as improvements in light discomfort measured by the ocular photosensitivity analyzer, or OPA, and are supported by anecdotal patient reports.

The safety profile for all adult patients and low-dose pediatric patients remains generally safe and well tolerated. Of course, we are incredibly pleased with these data, which further support our position as a leader in the field of ophthalmic gene therapy. We are confident that these data provide important validation for the broad potential of our AAV technology platform and build on and extend the favorable safety and efficacy profiles observed to date in the clinical trials of our XLRP product candidate.

We are advancing the achromatopsia B3 trial to the next stage of clinical development by preparing assays for pivotal ready testing, planning production of the clinical trial material and drafting an end of Phase 2 briefing packet to submit to the FDA. We expect feedback on the end of Phase 2 submission in the first half of 2022.

We’ve recently enrolled six pediatric achromatopsia B3 patients and five pediatric achromatopsia A3 patients in higher-dose groups 5a and 6a. The six patients across both trials in Group 5a had a generally safe and well-tolerated safety profile similar to all adults and the low-dose Group 4 pediatric patients previously reported.

Unfortunately, three of the five patients at the highest dose Group 6a developed new SAEs of significant inflammation at approximately one month after dosing. These are considered suspected, unexpected serious adverse events or SUSARs. Of the three patients, two are in the A3 trial and the third is in the B3 trial. An additional B3 pediatric patient at this same dose also developed significant inflammation during approximately the same postoperative timeframe. But this event, while considered an SAE, did not meet the definition of SUSAR.

To address the above safety events, systemic and local steroid doses have been increased, and patients are being monitored very closely. These events lead us to believe that we have found the maximum tolerated dose in pediatric patients. These new data do not change our plans to continue development of the achromatopsia product candidates as the body of data gives us confidence in our plan to move forward at appropriate doses.

In March 2021, Bionic Sight, which has responsibility for conducting our partnered optogenetics Phase 1/2 trial, reported promising results in its first two cohorts of patients. Bionic Sight reported that the treated patients, all of whom have complete or near complete blindness, can now see light and motion and in two cases, can detect the direction of motion. Based on this report, the product appears to be safe and well-tolerated and Bionic Sight is continuing to enroll patients at the highest dose levels. Sheila Nirenberg, the CEO of Bionic Sight, presented an overview of the trial, including additional positive interim results at the Gene Therapy for Ophthalmic Disorders Conference earlier today.

Now, I’d like to turn briefly to our preclinical pipeline. Our preclinical pipeline now focuses on one additional ophthalmic program, which targets the dry form of age-related macular degeneration or dry AMD and two programs targeting central nervous system or CNS disorders. The CNS programs address frontotemporal dementia, or FTD and amyotrophic lateral sclerosis, or ALS. These disorders represent diseases that have substantial patient populations and well-defined genetic and clinical phenotypes. The genetic targets for these indications are progranulin for FTD and C9orf72 for ALS. In each case, we have used our deep scientific skills to design a unique product candidate optimized to meet specific needs of patients with these indications.

Our dry AMD and FTD programs are moving forward to IND. And despite the current global shortage of non-human primates caused by the COVID pandemic, we have been able to secure enough non-human primates to initiate toxicology and bio-distribution studies in 2022. AGTC also has collaboration with Otonomy for a genetic form of hearing loss with an IND submission anticipated in the first half of 2023.

Our pipeline programs build on our industry-leading AAV manufacturing technology and expertise, while enabling us to expand into a broader array of indications that have substantial unmet clinical need. For example, a 50-liter manufacturing run can produce an estimated 2,000 ophthalmology doses. Based on data generated at our facility and by our CDMOs, we believe that our manufacturing process is not only more productive than other methods, but also produces material with greater purity and that the percent of vectors containing the desired gene of interest is nearly 90% and process residuals are generally below the detectability of current test methods.

Earlier this year, we presented data at the ASGCT annual meeting that described improvements in the manufacturing process for our XLRP product candidate to support future development, including potential commercialization. These same improvements will also be used to manufacture material for our pipeline programs. These data further demonstrate that we have developed a robust, reproducible, scalable and highly productive AAV manufacturing process, which will allow for a modest sized facility to fulfill supply requirements through potential commercialization.

To that end, we have reinforced our commitment to the advancement of our entire pipeline by leasing a 21,000 square foot cGMP manufacturing and quality control facility adjacent to our Florida offices. This new build-to-suit facility is part of our strategy to enable more rapid filing of a BLA and commercial launch of our XLRP candidate upon potential FDA approval. We also expect this facility to support development of our product pipeline, while providing supply chain redundancy and reducing the risk of vendor delays for both manufacturing and quality control.

In support of our corporate strategy to continue strengthening our leadership team, we have recently announced three important additions. In May, we appointed Janet Rae as Senior Vice President of Global Regulatory Affairs and Quality. Ms. Ray’s appointment is an important step in our strategy to prepare for anticipated late-stage development of our XLRP and achromatopsia programs. We also believe she will be instrumental in assuring regulatory compliance at our new cGMP facility. Last month, we also augmented our Board through the addition of ophthalmology and retinal disease specialist and an industry R&D veteran, Yehia Hashad, MD. For more than 25 years, Dr. Hashad has successfully led global development strategies from research to post-launch management for innovations that address high unmet medical needs, most recently as Senior Vice President and Global Head of Research and Development at Allergan Aesthetics. His experience as an accomplished pharmaceutical executive and physician, combined with his expertise in ophthalmology, specifically rare retinal diseases, brings invaluable perspective and guidance as we work to bring groundbreaking gene therapies to patients.

And most recently, we have strengthened our management team with the addition of Jon Lieber as our new Chief Financial Officer. With over 30 years of experience as both a CFO and investment banker, he is a seasoned financial and operations executive with valuable experience in the healthcare sector, making him a great addition to our team and you will hear from him shortly. Finally, in February 2021, we strengthened our financial position with a public offering, resulting in gross proceeds to the company of about $74.5 million. We are confident that this will provide a sufficient runway to accomplish our near-term goals.

I will now turn the call over to Stephen for comments on business developments.

Stephen Potter

Thank you, Sue. On our corporate development front, this past year, we entered into two license agreements that will allow our technologies and data to support continued development for potentially transformative therapies for inherited retinal diseases, while also creating new potential revenue opportunities should our licensees be successful in their endeavors. In April, we entered into a licensing agreement that provides our proprietary cone-specific promoter technology to SparingVision SAS, a genomics medicine company developing vision-saving treatments for ocular diseases. AGTC and SparingVision share a common mission to improve the health and vision of patients suffering from inherited retinal disorders.

AGTC received an upfront payment and is eligible to receive milestone payments for successful clinical development and royalties on future sales on a per product basis. Also in April, we entered into a licensing agreement with TeamedON International, under which we provide TeamedON with the clinical trial material, preclinical and clinical data generated for the development of our investigational intravitreal gene therapy candidate for the treatment of X-linked retinoschisis, or XLRS, which is an inherited disease that causes loss of vision due to degeneration of retina in males. AGTC is eligible to receive milestones and royalties based on clinical progress.

I’d now like to turn over the call to Jon to review our financial results.

Jon Lieber

Thank you, Stephen. For the fourth quarter of 2021, we recorded a net loss of $12.1 million compared to a net loss of $14.5 million for the fourth quarter of 2020. The decrease in net loss was primarily due to license fee revenue of $500,000 from our SparingVision arrangement, a reduction of $500,000 in R&D expenses, primarily due to the timing of such activities and an income tax benefit of $2.2 million from the reversal of certain income tax reserves. Partially offsetting these items was an increase in interest expense of $500,000 from borrowings under our secured loan agreement, which closed on June 30, 2020 and was amended and increased in May 2021.

Additionally, general and administrative expenses were up slightly year-over-year. For fiscal year 2021, we recorded a net loss of $57.8 million compared to a net loss of $45.9 million for fiscal year 2020. The increase in net loss was primarily due to reduction in total revenue of $2.0 million, an increase in R&D expense of $8.6 million and an increase in G&A expenses of $0.9 million and a decrease in other income expense of $2.6 million. Partially offsetting these items was the income tax benefit of $2.2 million attributable to the reversal of income tax reserves, which I mentioned earlier.

The change in revenue was due to certain fiscal year 2020 non-cash collaboration revenue from our Bionic Sight arrangement that did not recur in fiscal 2021. The increase in R&D expenses was primarily the result of increased external XLRP spending for planned manufacturing, chemical site preparation, and other activities related to our Skyline and Vista trials as well as increased external spending for planned material production costs in connection with our CNS preclinical program targeting FTD. Partially offsetting these increases were lower external achromatopsia costs. The increase in G&A expense was primarily due to higher legal fees, which were partially offset by a reduction in employee-related costs. The decrease in other income expense resulted from lower investment income and higher interest expense during fiscal year 2021.

Now, I’ll move on to our financial guidance. We ended the fourth quarter of 2021 with a strong balance sheet, including total cash, cash equivalents and investments of $107 million as of June 30, 2021. We believe these funds will be sufficient to allow us to generate data from our ongoing and planned clinical programs and fund currently planned research and discovery programs into calendar year 2023.

That concludes our remarks today. Operator, you may now open the line for question-and-answer period.

Question-and-Answer Session

Operator

Certainly. [Operator Instructions] Our first question comes from the line of Matthew Luchini from BMO Capital. Your question, please.

Matthew Luchini

Hi, good afternoon. Thanks everyone for taking the question. First, on XLRP, just wanted to understand a little bit more on the revised guidance timing. And I guess, in particular, trying to understand how much of way is a function of cancellations, which is sort of implied in the press release versus screen failures or perhaps said another way, how much of this is going back to those people that you’ve identified that just canceled versus needing to go out and actually get more patients?

Sue Washer

Good afternoon, Matt. Thanks for the question. That’s something that really is very pertinent to explain and to understand. We did have a 58% cancellation rate. It’s the exact number that we had in July and August. And so, a great deal of what we’re going to be doing is going back to those patients and rescheduling them in to actually be screened.

We did have – every trial has a screen failure rate, and that plays a role, but we really feel like by bringing these patients back in that we will be able to meet our guidance. And we’re working as fast as we can. We also think another big part of being able to ramp back up is that we have added that second mobile vision center. And that – our first one has been very well used, very appreciated by the site and by the patients. And so, we think by having the second mobile vision center that, that will also really help us to finish enrollment of the trial.

Matthew Luchini

Okay, great. Thank you. And maybe on achromatopsia, a couple of safety events here, maybe the first thing would just be, is there anything about those patients that experienced the few stars [ph] that was somehow differentiated them from a baseline characteristic perspective or anything else from the others?

Sue Washer

Yes. Matt, do you want to address that question?

Matt Feinsod

Sure. Sure. Good question, Matt. What really differentiates some is that they were pediatric subjects, and they were at the highest dose. You’re talking about much younger patients than the adults who have been dosed and who did not have any issues of inflammation at that same dose.

Matthew Luchini

Okay. And maybe just last one would be, can you – the – just, I guess, to confirm that the – you mentioned pediatric patients, but the product that they received was, I guess, cleanly or properly manufactured. In other words, there is nothing from like a contamination perspective or anything like that. And then with that, I’ll get back in the queue.

Sue Washer

Yes, Matt, that’s a very good question, and it’s very simple. It’s the exact same lot. We have used one lot to treat all patients in the trial. So, there was no difference in the lot. And the material had actually just undergone a stability test point. So, we’re very confident that this is not manufacturing related for sure and not related to product.

Matthew Luchini

Okay. Thank you for taking the questions.

Operator

Thank you. Our next question comes from the line of Joe Pantginis from H.C. Wainwright. Your question, please.

Joe Pantginis

Hey, everyone. Good afternoon. Thanks for taking the questions as well. So I guess, with regard to these AEs, first, I just wanted to find out, are the steroids working well and these kids are doing okay at this point?

Sue Washer

So, Matt, do you want to address that question from Joe?

Matt Feinsod

Sure. Sure. Good question, Joe. Fortunately, with the adjusted steroid regimen and other treatments, these patients have been responding. This is early days, of course. And so, we continue to monitor the patients. They are being seen more frequently than originally planned, as you would expect. And we’re hoping that the adjusted regimen continues to control the inflammation.

Joe Pantginis

Perfect. And it’s great also Sue the detail you just gave about all coming from the same lot. So, I guess I would combine my question with a comment saying – if I recall, I believe that this higher 6a dose at this highest dose is approximately threefold higher than the dose before that and if you can confirm. And then, I guess, I hope this is a rhetorical statement that you’ve essentially delivered on how the clinical study was designed to be able to – appears to be the maximum tolerated dose, and this is what dose escalation studies are for. And now, you have the correct information to move forward with.

Sue Washer

Well, thank you for that question and comment, Joe. And I can confirm that the highest 6a dose is 3x – approximately threefold higher than the dose Group 5. And so you have remembered that correctly. And I do appreciate your comment. We actually talked about this at a meeting today that part of the reason to do a dose escalating study is to identify if there is a maximum tolerated dose. And that’s exactly what we think we’ve identified here for pediatric patients. And it shouldn’t be all that surprising in the realm of drug development that a maximum tolerated dose for pediatrics might be different than a maximum tolerated dose for adult patients.

Joe Pantginis

Got it. And then I don’t know if this is going too much into the weeds, but was just curious, with regard to the timing of the SUSAR being about one month later, does this have anything to do with, say, the kinetics of the transgene expression or distribution?

Sue Washer

Matt, do you want to try and address that question? I think we probably don’t have enough information to know. But Matt, maybe you can...

Matt Feinsod

That’s right. No, I think that’s exactly right. So, I don’t think we know.

Joe Pantginis

Okay. No problem. And then if I could just switch gears really quickly and this is more of a macroscopic type of comment. Obviously, you’ve been making a lot of progress with Bionic Sight. You’re in the clinic now. And just recently, Novartis bought another optogenetics company. So it looks like we’re seeing a real increase in the visibility of optogenetics platform. I was just wondering if you had any, I guess, more generalized or macro comments about the space.

Sue Washer

Well, we have always felt, Joe, that optogenetics is a really exciting space. And we sought out and partnered with Bionic Sight several years ago, and we’re very excited about this space and think it could be a real benefit to patients that have lost their photoreceptors. So no amount of genome mutation is going to help those patients regain any vision. And so, we think it’s a very exciting space, not surprising that Novartis would be interested in it. We feel like we have an advanced program. We’re generating the human clinical data now. So certainly, farther forward in development than the other two programs that Novartis is involved in.

Joe Pantginis

Got it. Thanks for all the details.

Operator

Thank you. Our next question comes from the line of Zegbeh Jallah from ROTH Capital Partners. Your question, please.

Zegbeh Jallah

Thanks for the update and thanks for taking my question. I think the first one for me is also about the inflammation. I was just kind of concerned or I’m curious about at what time point you began to see some signs of inflammation?

Sue Washer

Yes, Zegbeh, thanks for that question. And I’m going to punt that over to Matt, and he can review with you the timing and course of the inflammation that we’ve seen.

Matt Feinsod

Right. So, Zegbeh, the inflammation has been seen approximately 1 month after the surgery in the majority of the patients. Of course, it varies by a few days in one direction or another, but it was approximately 1 month post dosing.

Zegbeh Jallah

Thanks, Matt, that’s good to know. So the patients that have cleared that hurdle, it’s unlikely then that we should probably see something in those patients beyond, let’s say, 2 months or so. And then I think the next one for me is just confirming that you’re probably going to move forward with a separate pediatric dose and then a separate adult dose? And then, when might we see data, I guess, from this pediatric patient population?

Sue Washer

So as far as what we’re going to move forward with achromatopsia B3, we are still compiling all of the data and developing our protocol. We did have a very productive meeting with all of our investigators and KOLs about the protocol design for the achromatopsia B3. And we think right now, it’s premature to decide on the exact dosing plan. Obviously, as we finalize that protocol and submit it to the FDA, we will decide upon a dose for adults and teens and going forward. And so that’s what we can say. As far as our guidance, we will provide data on the pediatric patients that we dose, we’re standing by our guidance of by year-end, that we will have efficacy data for these patients.

Zegbeh Jallah

Thanks, Sue. And then the last one for me, it’s kind of a combo question, but the first part is just about Bionic Sight. Any update on additional patients haven’t been treated? And then the last years any comments on your preclinical pipeline. I know you’re still kind of working on the time line of things, but any color as to what could be moving further up the pipeline? Thank you.

Sue Washer

So for the Bionic Sight program, that would really be a question for Bionic Sight. They are in charge of and have responsibility for the completion of the Phase 1/2. So we let them speak to the timing. Sheila, as I said, did present today at about 1:30 at a conference. And so I would – it was at the Second Annual Gene Therapy and Ophthalmology conference. And so potentially – I haven’t listened to it, but potentially she noted some timing there. So I would direct you to Bionic Sight for that. As far as our preclinical programs, as I mentioned, we’ve been able to secure the non-human primates, which was really no small task by our research group, such that we are going to conduct a toxicology and biodistribution studies for both progranulin and dry AMD next year. So those studies will be beginning in ‘22. And then, we also noted that the otology program, which is – the IND is under Otonomy’s hands, but they have messaged that, that IND will be filed in the first half of ‘23. So we are moving those three programs forward rapidly. The ALS program is still in discovery stage and that we’re defining the exact product construct, but we’ve had some very exciting data coming out of R&D and are hopeful to identify that that product constructs soon.

Zegbeh Jallah

Thank you.

Operator

Thank you. Our next question comes from the line of Yun Zhong from BTIG. Your question, please.

Yun Zhong

Hi, thank you very much for taking the question. So my question is, what gives you the comfort that you don’t have to change the Vista – the timing for Visa data readout? Is that because the number of patients is not specified? Or do you think you will be able to catch up in terms of patient enrollment?

Sue Washer

So, Yun, thanks for the question. I think that’s a very good question given that we did adjust the timing for Skyline. And the reason we are not adjusting the timing for Vista is because we’re benefiting from a couple of things. One, we will have the mobile – two mobile vision centers fully onboard and we will be able to use those for Vista. Also, we have significantly more sites initiating for Vista than we had for Skyline. Skyline, we relied on our Phase 1/2 sites instead of the expanded number of sites we have activated and are activating for Vista. So, it’s a combination of the greater number of sites, having two mobile vision centers and having been out in the marketplace, working on Skyline, if there is some overlap between the sites. And so these sites – those sites, at least, are very engaged and moving forward. And that obviously, we are hopeful that in the fall that this staffing, bandwidth issue at the academic referral centers due to the pandemic will be alleviated somewhat. So, those are the factors that play. We have also dramatically increased our patient outreach campaign and our website presence, our patient advocacy, interactions, etcetera. So, we still feel very confident in our Vista guidance.

Yun Zhong

Okay. And the second question is still a follow-up question on the inflammation. And is it normal for pediatric patients to have a lower maximum tolerated doses compared to adult patients for the type of injection?

Sue Washer

So, Yun, I think that, that’s a complex problem – a question. I think that overall in the life sciences, it’s certainly not unusual for pediatric patients to have lower doses of a wide variety of medications than the adult doses. I think that’s quite common for even over-the-counter medication. In gene therapy, I think it’s hard to say what’s common because there are not a lot of examples out there. But certainly, many gene therapy products are dosed on vector genomes per kilogram, which by definition means that teens will have lower doses. I don’t think that we have enough data out there in the ophthalmology space to be able to say what’s common or not. And then I would ask Matt, if he has any other insight into the question.

Matt Feinsod

No, I think you answered that Sue. thank you.

Yun Zhong

Okay, great. Thank you.

Operator

Thank you. Our next question comes from the line of Kristen Kluska from Cantor Fitzgerald. Your question please.

Kristen Kluska

Hi, good afternoon everyone. Thanks for taking the questions and Jon, congratulations on your appointment. I wanted to first ask a question. I noticed throughout the summer, through some of your press releases and your Linkedin media channels that you do a lot of work with different sponsorships and activities across some of the different patient organizations. And obviously, while talking to KOLs plays an important role of your job, I wanted to ask is you have spent a lot of time with these groups, particularly for achromatopsia, what have been some of the key takeaways or things that you are learning about the patient groups that perhaps you didn’t know when you first started trials here or things that have been perhaps heightened since that?

Sue Washer

Well, Kristen, thank you for the question, and thank you for joining us today. And I really appreciate the question because we believe that our role in patient advocacy is very, very important. And early on – I will tell one story and then I will punt it over to either Stephen or Matt to expand. But early on, it was our relationship with the achromatopsia patient groups that allowed us to understand how important light discomfort was to them as interfering with their quality of life. And that’s where we started working with Bascom Palmer to develop that the new light discomfort testing. And so, we think these close connections with patients are critical to really understanding their journey and to be doing the right tests and get the right information to help them make health decisions. So, I think that’s just one example, and now I will encourage Stephen and Matt to chime. And before they do, I will just also mention that having these relationships and getting the information out to them also is very helpful in recruiting patients into trials.

Stephen Potter

So, one other aspect of this is that these organizations have extensive networks and connections to the healthcare providers that actually treat patients. So, in the same vein, it’s a very effective way to leverage our communication out to the right people who are going to communicate with the patients who might be affected by the disease and might be eligible for treatment.

Kristen Kluska

Great. Thank you for sharing that. And then a question on XLRP, understand, of course, that the pandemic is playing a role in the trial, particularly related to these greater than 50% patient screening cancellation rates. But I wanted to get your thoughts about just interest in enrolling in trials, whether or not a patient is actually able to as a result of the pandemic at this time. Are you seeing any different trends in this related to what you saw when you were initially recruiting for that Phase 1/2 trial. So essentially, what I am trying to get at here is outside of the COVID-19 pandemic implications, whether having positive data on hand has made it easier to recruit patients in general?

Sue Washer

So, I think that’s a very good question, and it kind of tries to pull apart probably, what is the patient outlook and what is the specific impact of the pandemic. And we certainly believe that the patients very much want to participate. We have many, many patients that want to participate and some of them don’t qualify for some reasons based on our inclusion/exclusion criteria and they can be very disappointed in that information. So, the cancellations have been due to travel issues, due to the pandemic or due to just staffing and bandwidth at the site. And so, it has not been a reflection of the patient excitement about the program. We have many more patients calling in, expressing interest than we have room for in the trial. So, we think that the positive data we put out and the favorable safety profile have been very helpful in moving this program forward.

Kristen Kluska

Thank you. Appreciate it.

Operator

Thank you. Our next question comes from the line of Dae Gon Ha from Stifel. Your question please.

Jacques Villefranc

Hi, good afternoon guys. This is Jacques on for Dae Gon. Thanks for filling this in here and taking our questions. First, on the mobility test that’s to be utilized in the Skyline trial, can you remind us how differentiated it is from other mobility tests out there?

Sue Washer

Well, that’s a very good question because we are very excited about the addition of the mobility test and the information that it can provide for us because we are one of the few groups in the XLRP space that has seen improvements not just in microperimetry, but also improvements in visual acuity. And so, the mobility made really is kind of an umbrella test, which will be able to pick up both of those kinds of improvements. And then I will pass it to Matt to talk about the test itself and what the characteristics of the tests are. Matt?

Matt Feinsod

Sure. Good question. Yes, sure. So, it’s a mobility course that’s not too dissimilar from the course that was used as the basis of approval for Luxturna. It was roughly modeled on it, but it does have improvements because the field has continued to advance and they have been learning. And so we continued to optimize these tests. It’s a course that is adapted. Each time the patient goes through the course, it’s a different course, of course, so that it’s less predictable. And incorporates different light bubbles and assesses the lowest light level that the patient is able to navigate within a certain time period. And we use an external vendor who has an expertise in developing this course, and it’s, therefore, standardized across all of our clinical trial sites.

Jacques Villefranc

Got it. Thanks. And then if I could fit one more here, on your R&D Day, you spoke of the importance of quality of life measurements to conceptualize the therapeutic benefit. Just where are you currently in terms of developing one and getting it validated?

Sue Washer

Matt, do you want to address that question?

Matt Feinsod

Sure. So, there are existing quality of life instruments in the ophthalmic space that have been validated and are used. They have been standardized and used for a long time. None of those instruments is specifically designed for XLRP, unfortunately. So, while it does cover some of the aspects of the FRP patient experience, it’s not specific to their experience. We have looked into developing questionnaires that are more specific, and that’s an ongoing process. We haven’t yet finalized any particular questionnaire there yet.

Jacques Villefranc

Got it. Thanks and thanks for taking our questions and congrats.

Operator

Thank you. Our next question comes from the line of Yanan Zhu from Wells Fargo Securities. Your question please.

Yanan Zhu

Hi. Thanks for taking my questions. So, on the inflammation events, I am wondering, have you been able to determine whether the annuity action was directed towards the transgene or the vector itself?

Sue Washer

Thank you for the question, Yanan. And Matt, do you want to address this?

Matt Feinsod

Yes. That’s not something that, unfortunately, we have been able to identify yet. I think that’s – it’s still early days. These events are still very recent and are still, again, as we mentioned, being monitored very closely, but we don’t yet have the data that would allow us to draw that kind of conclusion.

Yanan Zhu

Got it. And also wanted to ask about any potential read through to the XLRP program, I think it might be helpful if you can review the SAEs that you have seen in your XLRP trials so far and perhaps also whether you have dosed any pediatric patients in the XLRP trial, actually the same Group 6 dose as seen with the inflammation with the ACHM trial? Thank you.

Sue Washer

That’s a very good question, Yanan and it’s a pretty short answer. So, we did not dose patients between 4 years and 8 years old in the XLRP trial at any dose. And we are moving forward into Skyline and Vista with the Group 5 dose. We did not move forward with the Group 6 dose. So, even though we plan to treat younger patients going forward in XLRP, we are not going up to dose Group 6. We selected dose Group 5 to move forward into the Skyline and Vista trials.

Yanan Zhu

Yes, got it. That’s very helpful. Thank you, Sue.

Operator

Thank you. This does conclude the question-and-answer session of today’s program. I would like to hand the program back to Sue Washer for any further remarks.

Sue Washer

Well, thank you. We are excited to close out our 2021 fiscal year with a great sense of pride in all that we have accomplished over the last 12 months, and the momentum we have created as we progress towards multiple data readouts. The growing body of clinical data gives us confidence that our XLRP candidate has best-in-class potential, and we are matching our clinical progress with critical advances in manufacturing and quality control capabilities as we chart a path towards commercializing a potential transformative treatment for this disease. We are excited to be moving forward our chromatography B3 program, which will become our second late stage asset, and we look forward to receiving FDA feedback on our end of Phase 2 submission. We are also proud that we have identified licensing opportunities that will allow our technologies to support other organizations that share our commitment to improving outcomes for patients in their efforts to develop ocular disease therapies. We have multiple critical data readouts in our XLRP and achromatopsia clinical programs expected later in 2021 and in 2022 that we believe will further solidify our position as a leading gene therapy company, support our efforts to commercialize therapies for patients with no current treatment options and provide additional opportunities for value creation.

As I always do, I will close today’s call by thanking the patients, physicians and the AGTC team for their dedication to our cause and their support of our efforts to transform the treatment of rare ophthalmic, otologic and CNS diseases. I would also like to thank all of the healthcare workers and first responders who are carrying tremendous burdens in order to protect our health and care for our friends, families and colleagues. I look forward to making additional progress and sharing our joint achievements with you in the months ahead, and I hope you and your families are safe and healthy.

Operator

Thank you, ladies and gentlemen, for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.

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