Q3 2020 Earnings Call

Good morning, and welcome to the AGTC third quarter 2020 financial results Conference call. Today's call is being reported before it gets started to like to remind everyone that during the conference call AGTC may make forward looking statements, including statements about the Companys financial results financial guidance.

Its future business strategies in operations and its product development and regulatory progress actual results could differ materially for lives discussed at these forward looking statements due to a number of important risk factors.

Including uncertainty occurred in the clinical development and regulatory process, the depth and duration of the impact to the Coke and I'd seen pandemic and other risks described as in the risk factor section that Agtcs most recent filings.

Filed annual report on form 10-K, and quarterly reports on form 10-Q.

Well with the FCC.

He DC undertakes no obligation to update any forward looking statements. After the date of this cool for introductions and opening remarks, I'd like to trickle over to Sue washer, Chief Executive Officer of AGTC Swatch Group. Please go ahead.

Good morning, and thank you all for joining US today with me on today's call our Bill Sullivan, Our Chief Financial Officer, Matt find side, our executive Vice President of global strategy and development and Mark Sherman, Our Chief Scientific Officer.

Provide a brief overview of the third quarter 2020, after which Matt will review our clinical programs Mark will review, our preclinical pipeline and then Bill will review our third quarter 2020 financial results. We will then take your questions.

I would like to begin today's call by highlighting the significant progress we've made in advancing our ongoing clinical programs and X linked retinitis pigmentosa or XL RP and a CRO autopsies caused by mutations in either the C N Gbpthree gene or the CNG Athree gene, we started 2020 with Sig.

If we get momentum announcing sustained improvements and visual functions for centrally dose patients at our EXL RP trial, and encouraging preliminary signs of biological activity in our chromatography or trials. We also completed enrollment and the Xcellair P. trial completed adult enrollment in both the chromatography or trials and strengthen.

Our balance sheet with a successful financing in February that raised net proceeds of just under $35 million.

We are fortunate to have completed enrollment and all dose groups, where they axle RP phase one two clinical trial and in all dose groups for adult patients with both the chromatography a trials prior to the widespread implementation of Kobin 19 related stay at home orders and cessation of nonessential medical care. Consequently, we.

Main on track to report data from all three programs and the second half a 2020, including topline 12 month data from both the peripherally and centrally dosed initial groups as well as data from the two new higher dose groups in the Exlar P. trial and additional data for all adult those groups in both the chromatography of trials.

We believe our industry, leading EXL RP data package has us well positioned for an end of phase two meeting with the F.D.A. in the second quarter of 2020.

The sustained biological activity observed to date in our Xplore P. clinical trial reinforces our optimism that the program will move forward into a pivotal trial by the end of Twentytwenty.

At our R&D day in late January we provided an update on our preclinical pipeline, which now includes two ophthalmology programs three programs targeting central nervous system or CNS indications and partnerships in the areas of optic genetics and genetic forms of hearing loss will provide more information about these probe.

Grams later in the call, but taken as a whole they give us multiple opportunities for future growth and value creation.

Our EXL or P. program is advancing toward a pivotal trial in 2020 and as Matt will discuss shortly the sustained improvement in visual function in four of eight patients dosed centrally and the phase one two trial gives us what we believe is an industry leading position in this indication. We have also seen early evidence of bylaw.

Trickle activity in both a chromatography or trials.

Our best in class technology platform unmatched manufacturing productivity capable of addressing larger patient populations and higher dosing and our extensive expertise and capabilities to support preclinical and clinical programs. We believe means that we have what it takes to develop game changing therapies that.

Provide meaningful benefit to patients.

I'd now like to provide an update on the steps we are taking to minimize the impact of cobot 19 on our clinical trials, our timelines and our business activities.

AGTC is well positioned to manage through this crisis with minimal disruption to our operations and manufacturing as I noted earlier, we have completed enrollment in all exlar Pete dose groups and all dose groups for adult patients a broke both the chroma tops. Your trials, we remain on track to provide multiple data read outs for.

Both our EXL RP, Anna Chroma Topsy, a clinical programs in the second half of 2020.

As a leader in gene therapy, we are taking innovative and creative approaches that seek to proactively address potential challenges. For example, we are exploring alternative methods of data acquisition, such as collecting data by a mobile vision centers and using local ophthalmologists closer to the patience as we strive to maintain there.

The thing timelines, where our programs.

We also have overlapping contracts at multiple see demos and GLP testing labs to manufacture and test our clinical trial material and as these organizations are at identified as a central businesses. We do not currently expect delays. We will however continue to assess the potential impact of coal.

19 on our business.

I will now turn the call over to Matt for an update on our clinical programs.

Thank you so I.

I will highlight a few key datasets from me XL RP ne chromatography, a clinical programs that were presented at the R&D day.

The full R&D day presentation is available on the events and presentation page on the AGTC web site.

Let me begin with an update on our ongoing phase one two clinical program in XL RP, which as you noted is moving toward a pivotal trial and 2020.

The data we presented at our R&D day in January demo demonstrated that our XR P. candidate provides early and sustained improvements in visual sensitivity that are supported by encouraging trends in visual acuity and corresponding quality of life survey results, suggesting that these improvements are noticeably impact.

King patients day to day life.

Coupled with the products favorable safety profile. These data have the potential to provide meaningful benefits to XR p. patients and will help to design the XL RP pivotal trial.

The graph on slide 10 shows a sustained increase in visual sensitivity in the four of aid Evaluable patients who were responders with the treated eyes shown in red and the untreated eye shown in Greg.

This increase in visual sensitivity was sustained through the six month time point.

Slide 11 shows a sustained increase in visual sensitivity and 50% of the treated eyes shown on the left compared with untreated eyes on the right.

Again this increase was sustained through the six month time point and the responders or clearly separated from the non responders.

On slide 12, the graphs show a positive trend in visual acuity in seven of nine patients with treated eyes shown on the left untreated eyes on the right.

Again this is sustained through the six month time point.

Some patients who are improved in either visual sensitivity or visual acuity also anecdotally reported noticeable improvement in visual function, including clear vision and reduced night blindness.

Based on the publicly available information from our competitors X all our P. programs. We're confident that we have a very strong competitive position and the syndication.

As shown in slide 13 were the only company to report improvements in visual acuity in our phase one two clinical study.

And we have reported strong durable improvements in visual sensitivity.

We've also demonstrated superior gene expression in side by side non human Primate studies and a more extensive stability profile.

Finally, we believe that we may have a safety advantage and not.

Unlike data reported in one competitors study, we have not seen evidence of recurrent inflammation in any patients.

The XR P. phase one two study is fully enrolled at 28 patients have been toast.

Slide 14 outlines our next steps and moving forward toward a pivotal trial.

We are on track for our into phase two meeting with the FDA and the second quarter of 2020 in which we expect to discuss the potential pivotal trial design outlined here.

We plan to report further hexcel RP data readouts in the second half of 2020, including 12 month data for groups one through four evaluating extended durability of the improvement in visual sensitivity and continued safety analyses as well as interim safety and efficacy data associated with the higher doses administered in groups five.

Insects.

These data Readouts will help us build a robust dataset to support our BLA filing.

And to maximize the potential benefit for the broadest range of patients create the strongest data package potential FDA approval and if approved commercialization.

Now, let me turn to the a chromatography program.

As previously announced in both a chromatography studies, we have seen early signs of biologic activity supported by patient reported outcomes with no dose limiting toxicity as well as DSMC approved dosing of pediatric patients to the highest dose.

Enrollment of the adult cohorts is complete and enrollment of pediatric cohorts is ongoing.

The graph on slide 16 shows change from baseline in light discomfort for treated and untreated eyes at three months post treatment.

Collectively both programs show encouraging preliminary results of biological activity. Unlike discomfort testing with two patients in the middle dose group and two patients in the high dose group showing indications of improvement.

These findings are very encouraging and support continued development of our a chromatography your clinical programs.

Both hey, chromatography programs showed that the product is generally safe and well tolerated.

It's important to highlight that for a majority of patients improvement in light discomfort is the most important outcome. Additionally, data and the published literature and input from our acreage the top tier experts suggest that we may see improvements in additional outcome measures at later time points in younger patients and or.

In higher dose groups, we look forward to sharing additional data with you in the second half of 2020.

I'll now turn the cold call over to Mark Shearman for a brief review of our preclinical pipeline.

Thank you Matt.

Before discussing our preclinical pipeline I'm pleased to report that the up to genetics program conducted by our partner Bionic sight continues to advance.

The phase one two clinical program has been initiated and the first patient has been treated.

Slide 18 shows the updated preclinical pipeline that we presented at R&D day in January.

We are advancing the multiple important pipeline candidates in ophthalmology.

Allergy.

Central nervous system indications.

Wonderful ophthalmology programs targets, the dry form of age related macular degeneration, Andy which represents a compelling me large market opportunity given that the disease affects over 24 million people globally.

And the other targets dog disease, which is one of the larger inherited retinal disorders with an estimated 70000 patients.

In collaboration with autonomy, we are targeting the June responsible for the most prevalent fall in the genetic hearing all.

We also have three programs targeting central nervous system disorders, which include our previously announced programming agreeing to look at just to be all healthy.

As well as two additional red genetic CNS indications when for example, dementia. That's you did.

On your trophic laterals goes, yes, that's essential patient populations and well defined phenotypes.

Oh pipeline programs build a industry, leading baby manufacturing technology.

His expertise, while enabling us to expand into a broader array of indications that have substantial unmet clinical need.

For example, a 50 these a manufacturing one using the process that will provide material Rob pivotal trials will produce an estimated 2000 ophthalmology doses.

Based on data generated facility on biopsy demos.

Manufacturing process is not only more productive than other methods, but also produced the material with greater clarity.

And that the percent effect is continuing to decide you had been trust is nearly 90%.

I will now turn the call over to Bill who will briefly review off fiscal results for the third quarter of Twentytwenty.

Thank you Mark.

Slide 21 provides an overview of our financial results.

In the third quarter of 2020, we recorded a net loss of 11.2 million compared to net income of 11.5 million for the third quarter. A 2019 the increase in net losses, primarily due to 21.3 million in revenue in the third quarter 2019, and a 1 million increase in R&D expenses.

The 21.3 million in revenue for the third quarter 2019 was primarily due to recognizing revenue associated with a termination of the collaboration agreement with Biogen.

The 1 million increase in R&D expenses is primarily the result of increased equal to talk to you spending due to patient enrollment in new site activation and increased xcellair piece spending associated with patient enrollment.

<unk> expenses were about the same compared to the same quarter a year ago.

Now I'll move on or a financial guidance. We ended the third quarter 2020, with a strong balance sheet supported by the successful February financing totaling net proceeds of just under 35 million.

Total cash cash equivalents in investments as at March 31st 2020 were 84.5 million. We believe these funds will be sufficient to allow AGTC to generate data from our ongoing clinical programs initiate a pivotal trial on XL RP and fund the prioritize preclinical programs, we just discussed.

Into the second half of 2021.

That concludes the teams remarks today operator, you may now open the line for question and answer period.

Thank you would all be conducting a question answer session. If you like to be pretty smoothly question could you. Please press star one under telephone keypad.

A confirmation told will indicate your line is in the question Q.

The press Star too if you like true movie question, probably Q.

For participants using speaker equipment to be necessary to pick up your handset before pressing star one.

One moment, please what we pull for questions.

Our first question today is coming from Jim Birchenough from Wells Fargo. Your line is now life.

Yes.

Sure. Thanks for taking the questions and then congrats on staying focused through the pandemic I guess first just given where we're at in the second quarter should we assume that meeting date has been set without the need for end of phase two and I'm. Just wondering how you will share the results of.

Any such meeting and then I've had a follow up.

Good morning, Jim. Thanks. Thanks for your question. So we have provided guidance that we are confident that we'll have the end of phase two this quarter and based on our interactions. We are we remain confident and as we've talked about Oh before once we have that meeting and are able to digest the recommendations from the.

FDA, we do plan to communicate publicly.

More information about the pivotal trial when it will start and what the design will be.

Okay, Great and then just so if you could just touch on you know as your adapting to the covert 19 environment and potentially having to evaluate patients more in local settings. You know how does that affect sort of intra observer variability in past measures if at all the peak.

Just just touch on how your adapting it it has any effect at all sort of tests measures.

Well I'll start this and then I'll ask Matt to provide a little bit more color, but the machines that we would use even locally are the same machines that have been used at the trial sites and they are calibrated by our reading center and we feel that the physicians ophthalmologists that we're using our well trained.

These matters, Matt do you want to provide a little bit more color on that.

Yeah I'm sure I think you basically said at some of that Jim as you mentioned the machines Har Har run by techs, and we confirm that invalidate tetra tech's or sufficiently qualified to operate the machines. For example on the Microperimetry comment individual Q.

But he is being tested in a standard clinical trial rigorous fashion et cetera. So we're taking measures there to confirm that standard testing has conducted.

And then maybe just one final question going earlier in the pipeline just on the CNS programs and things like FTD and LSW. There are other programs a little further ahead and just wondering how youre a bees compare if you've done any you know side by side comparisons will be rabies or anything to suggest you might have an advantage over the age.

These are using.

That's good question, Jim and I can I ask mark to provide some more detail, but we did do extensive analysis to make sure our products were differentiated mark.

Yeah, we we haven't done direct head to head comparison with compared to the components because we don't know all the details for the Sue mentioned, we as part of our L.D. program. We did do a comparison study with across a number of comps is to select the one that we focus most suitable for interest and then back now.

This thing and then.

Differentiation perspective.

You know we pursued the usual customization and optimization of promote isn't he had interest cost. So that's that's been approach.

Terrific well, thanks for taking the questions guys.

Thank you next question two days coming from David Nierengarten from Wedbush Securities. Your line is alive.

Hi, Thanks for taking my question.

Maybe just a follow up on a measurements of patients.

Yeah, I guess it are there.

[noise] patients sort of this measurements or delayed measurements a great in the study and you're kind of what are your contingency plans for data analysis on those patients suspected thanks.

Well good morning, David and happy to clarify that a one of the things that we think is an advantage or the gene therapy method of actions that the patients have been dosed in the medication continues to.

Be active in the patient too long periods of time, that's obviously one of them being insisted gene therapy.

So even if the date at a local ophthalmologist or potentially back at the site at sites. We reopened is not exact a we still have the ability to collect data and so that is what our focus is to get is close to the exact time point as possible, but because of the long term Nate.

Sure the follow up Oh, we are we are able to still collect appropriate data and I think that the F.D.A. guidances have said that they understand the challenges and that they'll be cooperatives and interactive with developers on how that day that gets analyzed.

Yeah, I just wanted to check thanks.

Thank you that's questions raised coming from out through can be from BMO capital markets or why there's no alive.

Hi, Steve This is no on for Matt.

I'm just.

Looking at.

Cobot 19 impact noticed that you're saying that the enrollment of new patients is being impacted and looking at your studies. This seems to imply that pediatric patient enrollment for a CHF.

Studies might be slowing down.

Just thinking ahead do you do more data from the pediatric patients to make a decision about.

Going into the pivotal trial and the second half and does this mean like there will be.

A.

He longer to make that decision.

And then also Boguski Opto genetics program. Congratulations on you know first patient being initiated.

Can you give some guidance our when we might see preliminary data from that program. Thank you.

Well. Thank you for the questions not Oh, I'm speaking to the our patient enrollment for three lead programs all of the adult patients a nice RP and that completes enrollment for actual R. P and all the adult patients and achromatopsia have been enrolled so obviously no further issues with enrollment there with regards to.

Pediatric patients those have always been challenging to enroll as you might imagine it's kind of a family a decision in a family travel situation well so they.

Enrolling in the pediatric patients SEC group dose groups continues to be challenging and its independent of the Corona virus situation.

We have said that to make decisions about moving forward into chromatography, yeah, we need longer follow up a higher dose groups and or pediatric younger patient information. So we're well on track for two out of three of those and as the data roles in a we will be analyzed.

Thing that data in the second half of the you're making decisions about moving that forward.

When it comes to the up to genetics program. We did indeed initiate that trial with by Bionic sight. They were able to dose the first patient that clinical trial site for up to genetics does happen to be in New York. So there will be some challenges to re opening that site and proceeding.

With a enrollment in that trial.

And as we get more information, we will provide guidance on timing.

Thank you that's very helpful. In congratulations on the progress.

Thank you.

Thank goodness question too is coming from Union Jones from Janney. Your line is now but.

Hi, Thank you very much for taking the questions. So the first question. It's a full question on.

Freestor meeting was <unk>, that's going to begin the sorry.

But you're also cardium was due to breed I'll update it did in second half.

Isn't that you would have data that you haven't now to be included in that did a package to be submitted yep yep.

So as we think for the <unk> question, Yunnan and it does follow up from our our research day as as well as this earnings release.

We had stated that in the end of phase two package and the discussions with the F.D.A. that we would provide them all the data that was in hand, even if that was interim very early data on on dose groups and that's certainly but we are planning to do is to discuss with them. The full amount of data we have.

And since we had completing those completed dosing on all those groups into concluding the to higher or whatever earlier interim data. We have we have included in our discussions with the FDA that meet however, we have guided that we won't release all of that group.

Five and six and later stage data into the second half of the year. So that we have a more complete data package that has been fully analyzed.

So the information that were Uh huh.

Sharing with the after gay is quite complete.

Okay and on the Phase three study design are there any details that need to be finalized the pump discussion with <unk> and the did I hear correctly that to ours will be dose sequentially and that's the case or how long is in trouble and is your information because you're going to collect between the two doses.

So oh.

One of the main purposes of the end of Phase two meeting is to talk with the FDA and get their recommendations as to the design of the trial and and that's the very important purpose of the under phase two meeting and I'm going to ask Matt to comment more on how that interaction occurs and what our current thoughts are about.

The pivotal design man.

Sure. Thanks your answer the question.

As you as you saw and just noted it is in fact, a bilateral study design, where we'd be dosing both highs we would not be operating a both eyes on the same day of course, but there would be a standard and accepted interval that the surgeons are comfortable with which is usually a couple of weeks at a minimum.

Between the high is and the reason why we believe that bilateral dosing is important is because the FDA historically has preferred to see data in a clinical trial setting and the way that the product ultimately would be commercialized and used in the real world setting.

At of course, yeah should the product proved to ultimately be safe and efficacious and be commercialized.

Patients would would certainly elect a in many instances to have both highs dust and so that's why.

The study design is proposed as you saw.

Great. Thank you very much.

Thank you as a reminder, ladies and gentlemen that star one to be placed and good question Q. Our next question is coming from zinc binge other from Roth Capital Partners. Your line is alive.

Good morning, just another quick question since you were mentioning that impact the that longer time planes, a younger patients in higher guest on Dan on the top patients wanting to know was claims are more likely to be influenced by time and then I just had a quick question about potential timing of ideas, but this backlog and.

As you know look a descovy setting.

Well good morning, and say what thank you for the questions I'll I'll start with a preclinical programs. We have not provided any guidance on the timing of the I.M.D. and or clinical trials on those programs as of yet as those programs mature will provide a minute more visibility.

On exact timing.

When it comes to the Achromatopsia program in the endpoints that would be potentially become more important over time I'm going to ask Matt to address that question.

Sure. Thanks, So I'm, so sorry, right as you mentioned, we did and stooge. So just stated again that the three factors. There we believe might influence ultimately the outcomes are the extended follow up on the patients a higher doses and the younger patients.

And to date as you saw in the presentation. We've seen some early evidence of improvements in light discomfort, which as we mentioned is a key symptom for patients and many many instances.

When serving patients. This is something that paid most be interested in and having an improvement with a therapy terms of other endpoints that we'd be following.

Those would include visual acuity.

And perimeter free wishes measuring retinal sensitivity as well as color vision and because those are really three of the other primary symptoms that patients present with.

Thanks, Matt.

Thank you and its questions coming from your money, whether blanketing from H.C. Wainwright Your line is alive.

Good morning, guys and thank you for taking my questions Oh, let's just wondering given youre, calling in for this oddsson projected timeline well would have excellent Pete and can you I posed putting in yes tied up in context with the competition. They can do you see.

Given your current position do you see.

Any competitor in this space and he accident feet draw them. Thank you.

[noise] grew up your phone is on mute.

Hello, right about that sorry, sorry about that guys I could have my phone on mute I apologize. So thank you for the question a menu Ella and we certainly understand that those come competition and they actually piece base, we were able to complete full enrollment of our phase one to try.

Well as we mentioned and we feel that the data set that we presented in January is very broad very robust Oh, we're the only company as match data to show not just improvements in visual sensitivity, but also significant trends in a visual acuity for the patient as well as Oh.

Quite favorable safety profile. So we think we're very well positioned to be moving this product forward, a we're very well positioned from a timing standpoint to complete that into phase two meeting and move into a pivotal trial.

Thank you.

Thank you we reach of our question answer session. We're about to turn the floor back over to Sue washer pretty further for closing comments.

[noise]. Thank you.

We believe that our achievement in the third quarter 2020, and our continued progress toward a pivotal trial for EXL RP position us for success with our current clinical programs and for continued leadership in the field the baby base gene therapy.

Based on published data, we believe we have an industry, leading exlar p. clinical data in endpoints that are meaningful to patients and differentiate us from competitors.

Although many of our employees are working remotely the entire AGTC team remains committed to advancing our programs and are keenly aware that the cobot 19 pandemic does not reduce minimize or obviate the significant unmet need that patients with X RP Anna chromatography has still face every day.

We are eager to maintain momentum in our ongoing clinical trials, but as always the safety of the patients and physicians who participate in these trials remains Paramount and we will move forward with our programs accordingly.

As they always do I'll close today's call by thanking the patients physicians in the AGTC team for their dedication to our cause and their support of our efforts to transform the treatment of rare ophthalmic otology 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 care for our friends families and colleagues.

I look forward to making additional progress in sharing our joint achievements with you in the months ahead and I Hope you and your families are safe and healthy.

Thank you that does conclude todays teleconference. You may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.