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Edited Transcript of BOLD earnings conference call or presentation 6-Aug-19 8:30pm GMT

Q2 2019 Audentes Therapeutics Inc Earnings Call

SAN FRANCISCO Aug 9, 2019 (Thomson StreetEvents) -- Edited Transcript of Audentes Therapeutics Inc earnings conference call or presentation Tuesday, August 6, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Andrew H. Chang

Audentes Therapeutics, Inc. - Director of IR

* Matthew R. Patterson

Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO

* Natalie C. Holles

Audentes Therapeutics, Inc. - President & COO

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Conference Call Participants

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* Anupam Rama

JP Morgan Chase & Co, Research Division - VP and Analyst

* Dae Gon Ha

SVB Leerink LLC, Research Division - Associate

* Debjit D. Chattopadhyay

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Difei Yang

Mizuho Securities USA LLC, Research Division - Executive Director of Americas Research

* Matthew W. Luchini

BMO Capital Markets Equity Research - Analyst

* Nicole Ashley Gabreski

Piper Jaffray Companies, Research Division - Research Analyst

* Ritu Subhalaksmi Baral

Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst

* Samantha Corwin

William Blair & Company L.L.C., Research Division - Associate

* Steven James Seedhouse

Raymond James & Associates, Inc., Research Division - Research Analyst

* Whitney Glad Ijem

Guggenheim Securities, LLC, Research Division - Senior Analyst of Biotechnology

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Presentation

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Operator [1]

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Good afternoon, ladies and gentlemen, and welcome to the Audentes Therapeutics Second Quarter 2019 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the call over to Andrew Chang, Head of Investor Relations at Audentes. Please go ahead.

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Andrew H. Chang, Audentes Therapeutics, Inc. - Director of IR [2]

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Thank you, operator and good afternoon, everyone. Just after market close today, we issued a press release with earnings and operating results for the second quarter 2019. The press release and live webcast access are available on the Investors and Media section of the Audentes website at www.audentestx.com. The webcast link will be available for approximately 30 days.

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

Before we begin with prepared comments, I'd 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, August 6, 2019. 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, Chairman and Chief Executive Officer. Matt?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [3]

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Thank you, Andrew, and good afternoon, everyone. The first half of 2019 has been an exciting and busy time, and we are pleased to share the progress we have made across our product portfolio, as well as several important key milestones we expect for the remainder of the year and into 2020. We have a lot to cover so let's get started.

Beginning with AT132, our lead product candidate for the treatment of X-linked myotubular myopathy, or XLMTM. We are pleased to announce that we recently initiated enrollment in what we are calling a pivotal expansion cohort in our ASPIRO study to confirm the safety and efficacy profile of AT132 ant a dose of 3E14 vector genomes per kilogram.

We have selected this as the optimal dose based on the safety and efficacy data collected to date and the input of our scientific and medical advisors. We expect enrollment in the pivotal expansion to complete this fall and we believe the results will support the submission of a biologics license application for AT132 in mid-2020 and an MAA in Europe in the second half of 2020.

The decision to add a pivotal expansion cohort to ASPIRO, and its design, were based on a series of productive interactions with the FDA and EMA over the past several months, under our RMAT and PRIME designations respectively. The intent of these discussions was to collaborate with both agencies regarding how to rapidly advance AT132 to license applications based on the medical need and existing clinical data.

The specifics of the conversations largely focused on how best to further establish the benefit risk profile of AT132 at the 3E14 dose with rigor and minimal subjectivity. As always, it's a dialogue and it's incumbent upon us as the sponsor to take the feedback and design a study that both meets the regulator's objectives and allows us to move as efficiently as possible toward filing.

This need feels particularly urgent in XLMTM where half of these boys don't live to see their second birthday and there are currently no treatment options available. We are confident that we have developed a plan that balances these needs and will support the filing of licensed applications in the U.S. and the EU.

Before sharing the details of our regulatory discussions let's first review the overall enrollment of ASPIRO to date. We started cohort 1, at a dose of 1E14 vector genomes per kilogram, in which we enrolled 6 treated patients and 1 delayed treatment control.

We then escalated to cohort 2 at a dose of 3E14 vector genomes per kilogram in which we have now also enrolled a total of 6 treated patients and 1 delayed treatment control. However, it's important to remember that to date, we have only reported data from 3 patients treated at the proposed commercial dose of 3E14. So it was not surprising that a first recommendation of the regulators was to see more data from additional patients treated at that dose prior to filing.

Beyond this request to increase the number of patients treated at the proposed commercial dose, the regulator's feedback was focused in 3 main areas -- endpoint selection, study design, and duration of follow-up post-treatment. I'll talk about how we've addressed each of these areas in turn.

Let's start with endpoint selection. Consistent with our expectations, both agencies recommended focusing on endpoints that are clinically meaningful. Based on our own work and other publications in the field, we know that reduction of ventilator dependence is considered to be closely correlated with morbidity and mortality outcomes in children living with neuromuscular disease, including XLMTM.

In addition, as you can imagine, the decision to initiate and maintain young children on ventilator support is an important determinant of quality of life for both patients and their caregivers. As such, we've defined the primary efficacy endpoint for the pivotal expansion as the change from baseline in hours of ventilatory support over time through week 24 post-treatment.

Both the FDA and EMA have agreed that this is a clinically meaningful efficacy assessment and importantly, the data we have generated to date give us confidence that we can meet this endpoint. Recall, as of the April 29 ASPIRO data analysis, we saw sustained and meaningful reductions in ventilator support in all 9 patients treated with 4 patients successfully completely weaned off of mechanical ventilation. So we believe we are on solid footing for the primary efficacy analysis.

Now let's turn to the second main area of focus -- study design. We have designed the ASPIRO pivotal expansion cohort to enroll 8 patients consisting of 4 age-matched pairs defined as being within plus or minus 6 months of age of each other. One patient from each pair will be randomized to receive a single dose of AT132 at 3E14 vector genomes per kilogram. And the other will serve as a delayed treatment control.

Delayed treatment control patients will be administered AT132 once 24-week data are collected from the full pivotal cohort. In discussing the ventilator support endpoint, the regulators were focused on ways to reduce subjectivity and minimize potential bias in the decision-making around ventilator weaning.

As is usually the case, their recommendation for us was to run a double blind, placebo-controlled study. This was met with resistance from our investigators and data monitoring committee, who strongly questioned performing sham infusions and serial muscle biopsies on control patients.

So balancing the 2 perspectives, we have introduced multiple elements of control to the design of the pivotal expansion to increase the overall rigor and objectivity of the efficacy assessment. First, we've gone from a 3:1 randomization in the dose escalation cohorts to a 1:1 randomization, which amplifies the overall power to assess the treatment effect.

Secondly, we've age-matched 1-to-1 randomized pairs to control for any motor or respiratory functional changes that could be attributed to subjects' age. And thirdly, the ventilator weaning protocol now included a blinded review of all respiratory functional data by an independent panel of pulmonologists to approve all ventilator support reductions.

This third point in particular we view as critical, as it enables blinding of the primary endpoint without requiring the placebo-control. We are confident that our approach to study design will enable the regulatory authorities to interpret the data from the primary efficacy evaluation as reliable and accurate.

Finally, turning to study duration, the regulators were appropriately focused on assessing durability of benefit of AT132, and as is always the case, the more data and the longer the follow-up, the better. The key question is when is the optimal time point to perform the data cut to support a filing.

Here, not surprisingly, the FDA guided towards 48-week follow-up. As we have previously shared, all patients in ASPIRO will be followed for safety and efficacy for 5 years. Our plan is to submit our license application once we collect 24-week data from the pivotal expansion cohort, by which time the filing will also include over 24 months of follow-up data from patients in cohort 1 and approximately 12 to 24 months of data from patients in cohort 2.

In total, we plan to submit with data from 22 patients, 18 treated, 10 of whom will have been followed for 48 weeks or longer, which we believe will strongly support the durability of benefit with AT132.

So in summary, we believe we have put together a robust plan that addresses the feedback of the regulatory authorities, moves this important program forward rapidly, and in the end, will demonstrate a positive benefit risk ratio in support of potential licensing approval for AT132.

As I mentioned earlier, we have already initiated enrollment of the pivotal expansion cohort and plan to complete dosing by the fall. And importantly, all other aspects of our preparation for license applications are proceeding well, including on the CMC side, as Natalie will touch on in a moment.

Before we turn the remainder of our pipeline, I'd like to thank all of our partners and collaborators, the [BOLD] team members, our scientific and medical advisors, and of course, the XLMTM community, whose courage and strength are a constant reminder of our mission to bring AT132 to patients as quickly as possible.

With that, I'll turn the call over to Natalie to walk us through the rest of our pipeline and make a few wrap-up remarks. Natalie?

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Natalie C. Holles, Audentes Therapeutics, Inc. - President & COO [4]

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Thank you, Matt, and hello, everyone. We've made tremendous progress in our pipeline programs in the past quarter and I'm pleased to walk you through the highlights of our recent work. Starting with our Pompe program, we continue to advance our product candidate, AT845, towards an IND filing later this quarter. We've now completed our dose-ranging and GLP toxicology studies on both the Pompe Mouth and NHPs respectively, and are in the process of finalizing study reports and preparing the IND submissions with an eye towards initiating clinical studies early next year.

Our expertise in systemic administration of AAV8 to drive broad muscle tissue transduction and transgene expression provides us with a highly differentiated approach in Pompe disease. We believe AT845 is the only gene therapy in development today, which is delivering and expressing GAA directly in the tissues affected by the disease.

This potentially best-in-class approach stands in contrast to both enzyme replacement therapies and liver-directed gene therapy candidates that rely on an inherently inefficient cellular uptake mechanism of GAA from plasma to deliver the enzyme to its intracellular site of action.

As such, we avoid the need to engineer the GAA transgene to optimize for serum stability or cell surface receptor binding affinity with this approach. We're excited to bring this program through to IND submission, as we believe it has transformative potential for the treatment of Pompe disease.

Turning now to our Duchenne muscular dystrophy programs. We're excited about the rapid progress we've made since we announced our platform and pipeline expansion in early April. As a reminder, in DMD, we are initially advancing 3 vectorized exon skipping product candidates, which we believe together have the potential to address more than 25% of the Duchenne patient population.

AT702, which is the most advanced of these programs, is designed to treat DMD caused by applications of exon 2 or mutations in exons 1 to 5 of the dystrophin gene. Nationwide Children's Hospital, our collaborator for this program, plans to initiate patient dosing next quarter using their clinical material, which was manufactured at their facility. We expect Nationwide to dose 1 to 2 patients prior to the clinical program transitioning to our construct and clinical material early next year.

In parallel with the NCH work, we have successfully completed work to transition to and manufacture our AT702 construct in-house. Dose-ranging and toxicology studies are underway to support an IND filing for the Audentes product in Q1 of next year. We expect to initiate a full Phase 1/2 study of AT702 quickly once the IND clears.

We took the time over the past few months to refine the NCH construct because we intend to use the back bound as a platform for rapid expansion of our vectorized exon-skipping approach into additional DMD genotypes and to good effect. We have achieved meaningful improvements in the manufacturing, productivity, and product quality in making the transition to our construct.

So importantly, as we did with XLMTM, we expect to initiate our Duchenne clinical work with the commercial product and manufacturing process in place. From here, we're well positioned to rapidly advance our preclinical work on AT751 and AT753, our additional product candidates designed to treat DMD patients with genotypes amenable to skipping of exon 51 and 53. We expect to provide more refined time lines for moving these programs into the clinic in our coming updates.

In myotonic dystrophy, vector-screening studies for AT466 are underway and we plan to submit an IND in 2020. While relatively early in its development, we're excited about the potential of this program. As a reminder, we are evaluating both vectorized RNA knockdown and exon-skipping approaches, each of which have been mechanistically validated to block the accumulation of toxic RNA in affected cells, the key pathologic mechanism in DM1.

We believe that by combining antisense, with the delivery and tissue transduction power of AAV, we overcome the recognized limitations of naked antisense and create the potential to provide transformational impact on this devastating disease, which affects more than 100,000 people in the U.S., Europe, and Japan. So more to come here and we're certainly pleased with the early progress.

Turning to manufacturing. We continue to view our investment in our own internal large-scale cGMP manufacturing operation as a key strategic value driver for the company. It has enabled our rapid progress through clinical development toward BLA and MAA filings for AT132, as Matt shared earlier. And more recently has allowed for accelerated preclinical development of our Pompe, Duchenne, and myotonic dystrophy programs.

Our current operation, utilizing a mammalian, serum-free suspension culture production process at a 1,000-liter scale, is expected to meet the anticipated global commercial demands for AT132 and the near term development needs for other product candidates.

Also in April, we were pleased to announce our new, state-of-the-art cGMP plasmid manufacturing facility. We brought plasmid manufacturing in for reasons similar to our early decision to bring in vector production, to improve control over our supply chain, reduce cost, and accelerate production time lines for this key starting material.

We expect this internal capability to take months off of our development time lines across the pipeline over time. Leveraging all aspects of our AAV manufacturing leadership for rare neuromuscular diseases will continue to be a cornerstone of our strategy for long-term value creation for our shareholders.

Finally, we continue to maintain a strong balance sheet with $378.6 million of cash, cash equivalents, and marketable securities as of June 30. Our balance sheet strength positions us to make meaningful progress across our pipelines and we are excited by the multiple upcoming milestones, and look forward to sharing further updates over the coming months.

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

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Anupam Rama with JPMorgan.

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Anupam Rama, JP Morgan Chase & Co, Research Division - VP and Analyst [2]

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Congratulations on all the progress. Just 2 quick ones from me. With the 8 patients in the pivotal ASPIRO cohort, have these patients all been identified? I think you said enrollment was complete this fall. And then a second question for the world muscle update later in the year, what additional analyses could be presented beyond kind of the endpoints we already know. And can you remind us the duration of follow-up we'll get at the conference?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [3]

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It's Matt. Thanks for your questions. Those are pretty quick ones. The 8 patients indeed are identified. I can remind people that we've been continuing our INCEPTUS natural history and run-in study in the background alongside ASPIRO all along. And so we've maintained a pool of patients that might be candidates for ASPIRO should we need additional enrollment.

And so of patients are identified and it's just a matter of working through the logistics of enrollment over the coming couple months here in the fall, as we said. So yes, we expect to complete enrollment this fall and obviously, that's what helps get us to the BLA mid-next year.

WMS, its a little fluid is the honest answer. We certainly will have a data update but I'm not in a position today to articulate exactly how much additional data and in exactly how many patients. The team is working on that and finalizing that plan right now. At the same time, they're working on enrollment in the study and BLA preparation activities, et cetera. So we'll have a little more color on that as best as we can here in the coming weeks.

But I would say that I don't expect it's going to be quite as much of a data update as we had at ASGCT. It will be a meaningful update but it probably won't be quite as much data as we had as ASGCT. That's my initial read on it.

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Operator [4]

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Our next question comes from Chris Raymond with Piper Jaffray.

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Nicole Ashley Gabreski, Piper Jaffray Companies, Research Division - Research Analyst [5]

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This is Nicole Gabreski on for Chris. I guess I just had a quick one on AT132. So you guys have highlighted that you've used the same process and the same facility to set the same scale from preclinical IND-enabling work all the way now almost to commercialization. But I was just curious, are you currently manufacturing or moving to manufacturing plasmid for AT132 in-house for the program prior to BLA filing?

And then also just wondering what the regulatory hurdles might be or if there's certain data you need to show FDA to confirm you have an equivalent product when you switch to plasmid made at a new production site. And then just lastly, does this have any impact on BLA filing times at all for the MTM program?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [6]

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Thanks for the question. A bit of a work in progress but plasmid manufacturing up and running and going well. I would say that our current vision is to include it in the license application, but we certainly want to make sure that that plan is comfortable to the agency and if there's any work to be done, which in terms of comparability that we handle that. Our guess would be that animal data would be satisfactory for that, frankly. But that's a bit fluid.

But I can assure you that we're in a position where it won't become rate limiting for the BLA filing. And if, for some reason, we needed to do a little bit more work, we would file it as a post-approval change. We're in a position to be able to be flexible in that regard. So certainly, we'll do our best to get it in and leverage it as much as we plan to. But we won't let it delay any BLA filing.

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Operator [7]

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Our next question comes from Joseph Schwartz with SVB Leerink.

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Dae Gon Ha, SVB Leerink LLC, Research Division - Associate [8]

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This is Dae Gon dialing in for Joe and congrats on all the progress. So Matt, just 2 questions from me, one on AT132, and the second question on DMD. Apologies if they're kind of multipart questions.

But I guess starting with the 132, just wanted to get your take on sort of that 8 patient number. I think you previously talked about expansion cohort enrolling 3 to 5 patients and we now have 8. I understand that it's now randomized 1-to-1 so maybe it is just a semantics kind of thing where 4 patients does fit in with a 3 to 5 guidance you provided previously. So any color there would be good.

Second question is on DMD. So you mentioned that 702 will enter the clinical trial in 1 to 2 patients using the NCH-based material. I'm assuming that's adherent-based system and you're working through the conversion to suspension-based. So how many patients are you thinking in terms of Phase 1/2? And as we think about your subsequent programs in 51 and 53, any chance you could run a basket trial, especially since the 53 patients are somewhat of a small underrepresented genotype amongst the DMD population. Thanks.

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [9]

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Thanks, Dae Gon. I took some notes. Hopefully, I get these right, but check me if I don't. So regarding the AT132, yes. So I tried to say it in the script but let me just restate the patient numbers because I understand that potential for a little confusion.

Cohort 1, we all agree and understand 6 patients were treated and then there was 1 untreated control. Cohort 2, we first retreated 3 patients, and we had an untreated control and then we announced that we were going to expand that to enroll another 3 to 5. Today, we're announcing that we did enroll additionally those 3 patients into that cohort so that's done.

That is in fact distinct and separate from the pivotal expansion cohort, which is 8 patients, 4 treated, and 4 delayed treated. So hopefully that's clear and that gets me to those numbers I mentioned in the script, which is that in the end, the BLA would be filed on a number of 22 total number of patients, 18 who have been treated, 12 of whom have been treated at the proposed commercial dose of 3E14. So hopefully that makes sense.

And then on the DMD side, so yes. So look, the program, early research, as everyone knows, started at Nationwide. They're our partners on this. They have done additional work to answer FDA's questions and get a trial started. But indeed, you're right. It looks like they'll get started with treating 1 or 2 patients with the material they have made at Nationwide with their version of the construct. And that's on track to start here later this year as previously guided to.

But we've also chosen to optimize the construct. We're switching it to an AAV8 construct, which of course is what we use in our other programs. And as Natalie mentioned, we're pleased with how that has gone. And that's going to result in our own distinct IND that we're going to file in Q1, which is for that optimize construct, manufactured by our same, in-house, large-scale, serum free suspension culture system.

So that's the plan. So the vast majority of the clinical work will be from the Audentes product and starting first half of next year. NCH will get started with a couple patients and we'll see what we learn from that as part of the program.

And then finally -- but as far as specifics of the clinical protocol for that Audentes IND in Q1, and the number of patients and specific endpoints, don't have the details to go into on that today. But I expect we'll have that information and more color to provide there later in the year. It won't come as any surprise that we expect to evaluate a lot of the same assessments both in tissue and clinical assessments that have been seen to date in the Duchenne community, which will probably also translate over to what we end up doing in the clinic for 51 and 53.

And finally, your question about a basket IND. A little early to say there. We're engaging with FDA but you can bet that we are taking a creative approach to how to do this. We have highlighted previously that we're optimistic about our ability to move this program quickly given the fact that it's same backbone, same basic constructs in each case but for the specific antisense sequence for each exon.

And so one can envision a scenario that's very logical and credible where you can rapidly move through preclinical development for future exons and even clinical if you can find ways to be creative and leverage experience with various endpoints and designs to move the whole thing quickly. But we expect to engage with the FDA in that sort of creative dialogue in the coming months as well. And as we have progress, we'll keep you posted.

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Operator [10]

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Our next question comes from Ritu Baral with Cowen.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [11]

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On the pivotal cohort, what are your powering assumptions around the 1-to-1, the 8 patients randomized 1-to-1? You mentioned the primary endpoint is reduction in the hours of ventilator support through 24 weeks. What's your powering and what are your sort of placebo assumptions? Not placebo, sorry, delayed treatment control assumptions for what's going to happen to their ventilator support.

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [12]

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Well, no surprise, the team has done a thoughtful analysis of this and reviewed all of the -- thanks Ritu, sorry, for the question. No surprise team has done a thoughtful review of all the data we have to date and has gotten quite comfortable that 8 will power the study adequately to determine a statistically significant difference.

And as far as the controls, I mean we have the benefit of having monitored the controls during the early part of the study. And of course, you know the data as well as anyone, and we know that there were no changes in ventilatory status in the 2 control patients. And so of course, it's logical that one would expect the same in the control patients in this study.

And so there's a lot of high degree of confidence about 8 as a number to achieve that goal. And obviously, that's why we settled on the plan and are optimistic about next steps.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [13]

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Was that placebo, sorry, delayed treatment assumption, was that powered at all by some of the INCEPTUS patients or just the 2 patients in ASPIRO?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [14]

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I don't actually know the answer to that off the top of my head but I'm not -- I'm certainly happy to follow-up and double-check. But yes, so rather than speculate, I guess I can follow-up on it. But there's no data in any of our work, whether it's INCEPTUS or even RECENSUS, or natural history, or medical record review we did a while back, or, of course, the ASPIRO data in those control patients to suggest that any patient would have -- that's untreated -- would have any other outcome except just remaining on ventilatory support the whole time from baseline onward.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [15]

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And then just moving to your potential Pompe study, can you just give us broad strokes, outline us as to what you think that first clinical study will look like? Will you be able to enter pediatric patients immediately? Will be there a biopsy endpoint? Will there be functional endpoints and when?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [16]

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Sure. It's a little early to go into total detail but I'll share some introductory thoughts. And our expectation would be to be able to articulate more details once the IND is in, and cleared, and we have any agency feedback. But that being said, it's reasonable we believe to assume that this will be a study that more likely than not starts in adults. But certainly, we appreciate the importance of rapidly evolving the program to also treat patients who are suffering from infantile Pompe disease given the medical need. But we have a lot of experience in Pompe around the table. So we have some thoughts on how best to do that.

But I think starting in adults and no surprise, endpoints are likely to include both biopsy-based assessments or ones looking at protein expression, GAA in this question and glycogen levels, as well as relevant clinical endpoints, which are reasonably well established in the Pompe community from various clinical studies that have been done over time. A little bit distinct, obviously, between what one measures in the adult population versus the infantile of course. And that's why those may very well be appropriately studied in separate protocols, as has also been done in the past.

So that's probably all I can do for today but I'm happy to provide more details later in the year as we have any agency feedback on our plans.

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Operator [17]

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Our next question comes from Whitney Ijem with Guggenheim.

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Whitney Glad Ijem, Guggenheim Securities, LLC, Research Division - Senior Analyst of Biotechnology [18]

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First question is just on DMD, given the vector switch, I guess just wondering what, if any read through, or kind of how you guys are thinking about the read-through from the first 2 NCH patients that will be treated. Kind of what's the read-through from the data you'll get there as we think about the data from your program?

And then second question was just going back to the plasmid manufacturing. Can you just kind of remind us the benefit there other than obviously having control of your own supply. Are there any financial kind of benefits as we think about COGs?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [19]

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I would say how we think about the NCH versus our product is that the NCH data will be interesting and certainly, we'll take a look at it and learn what we can. But in the end, it will be a very low N. It's going to be 1 or 2 patients. And as Natalie articulated, we've made what we feel are powerful improvements to the construct for product quality and productivity in the manufacturing system. And it sets us up for this template approach for future programs.

So I would encourage people to think like we do, which is that the key data to begin interpreting will be the data from patients treated with the Audentes product over the course of next year. If there's something interesting to be gleaned from the first couple patients at Nationwide, so be it, and we'll talk about it. But that feels a bit unlikely to me given the low N and some of the product differences.

Sorry, second half of the question on the plasmid side. Yes, no question that it's multifaceted positive and remember, this is particularly critical when you work in neuromuscular diseases and we're working with larger doses of AAV. And of course, as we expand into Pompe, Duchenne, and myotonic, we're beginning to work with larger patient populations and patients who are heavier with per kilo dosing.

So the plasmid manufacturing is absolutely about control. We've seen some examples of setbacks for programs because there's been a quality question related to the raw material. But it's absolutely also about cost. And we believe this operation is going to pay for itself rapidly, given what we see as the cost of working with outside vendors in that arena so far these days.

And finally, I would say time lines. I mean it's a long lead time. It's just like trying to book space at a CMO for manufacturing your product, and reserving a suite, and spending money up front and then hoping everything tracks okay and that it works out. In this case, term insurance gives us much more certainty over our time lines and ability to hit our program development milestones. So it's really 3 things -- quality, cost, and confidence in our time lines that are behind that investment.

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Operator [20]

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Our next question comes from Steve Seedhouse with Raymond James.

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Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [21]

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So given -- it sounds like the FDA requested a certain design for the AT132 clinical expansion core and you settled on a bit different design details and duration of follow-up. I apologize if I missed this, but I didn't hear what then was the FDA's response or receptivity to your ultimate study design subsequent to the initial exchange? Do you have a written agreement on the final protocol or what's your level of confidence that the FDA is amenable to the trial design details that you laid out?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [22]

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We had a whole series of back-and-forth interactions with both FDA and the Europeans, the Europeans largely in the context of scientific advice procedure, but both written and verbal exchanges that sort of guided us to where we landed.

I would say that not surprising to us, FDA's sort of final agreement that one can file a BLA is something that they defer to the time when they have the full data set. And there's nothing surprising about that to us. That's standard course of business for rare disease drug development, in particular where you have a relatively small number of trials and patients treated.

But in the end, based on our digestion of their feedback through those multiple rounds, we feel very confident about our plan. And that was part of what I was hopefully able to articulate in the script conversation there, our written remarks, that when you really dig in and you try to evaluate what the agency is looking for with their requests, and really it does end up coming down to getting some additional data at that dose, studying a meaningful clinical endpoint. Collecting data in just a reliable way so they can believe that it's real and accurate.

And of course, they always say they'd like as much as possible. So we really worked very hard to accommodate all those. And so through all that, feel a high degree of confidence that in the end, we're going to strike a good -- we're going to put together a big -- a good presentation of data that produces a very positive benefit risk ratio, which is another important perspective to keep in mind. This is X-linked myotubular myopathy, a fatal disease with no treatment. And so I think in the end, it's going to be a very compelling story and likely to move forward in a positive manner.

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Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [23]

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And I wanted to ask if I could, considering the focus at the company now on neuromuscular disease and move into vectorized exon-skipping, pretty novel approach, given the successes of Spinraza and SMA, Zolgensma that you can target with AAV and SMA pretty effectively, and preclinical data that shows vectorized exon inclusion in SMA is possible. You're already collaborating with NCH, has a history here. Is SMA an appealing indication clinically to you and would there even be freedom to operate with a vectorized exon-inclusion approach there if you were interested?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [24]

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We're certainly excited to go into a vectorized exon-skipping and in addition to standard gene replacement, as we've done historically. And we find that there is a wealth of opportunities out there that are interesting. But for now, I would say that our focus in the near term remains on the pipeline that we've recently announced and executing on Pompe, and Duchenne, and myotonic. There's a tremendous amount of opportunity right in front of us with the pipeline we've established.

That being said, the vision of the company will be to continue to add interesting programs over time. And if we think it's something with good medical need, and a strong scientific rationale, and a good strategic fit for us, you can bet we'll take it seriously. But for now, we feel really good about the progress we can make and the value we can generate with MTM, Pompe, and Duchenne, and myotonic. We're obviously in a position where we're really setting up for a very exciting 2020 in particular with BLA filing, and MTM, and the potential for proof of concept data in Pompe and Duchenne, and the IND in myotonic. So plenty of work to do.

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Operator [25]

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(Operator Instructions) Our next question comes from Debjit Chattopadhyay with H.C. Wainwright.

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Debjit D. Chattopadhyay, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [26]

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I've got a couple. So could you walk us through your updated thoughts on the XLMTM addressable commercial opportunity? And how do you think the label could play out given that you're enrolling patients primarily under the age of 5? And what fraction of patients alive over the age of 5?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [27]

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No meaningful changes from our previously stated commercial guidance. We think that the recent publications about MTM instance and prevalence, as well as our own data, still guide us to a place where we believe that there's an incident population of several hundred patients in the markets we would expect to pursue, and a prevalent population of 2 or 3 times that.

And indeed, you're right that we're focused on enrolling patients who are less than 5 years of age but that does cover the majority of MTM patients. That being said, we're taking a very thoughtful eye to our commercial preparations and wanting to ensure we have a very robust package of information for future payers to ensure patient access -- treatment access for all patients with MTM.

And so we're evaluating additional opportunities to collect any data in slightly older patients if that would be helpful to payers. So while we don't have a set plan on that today, that's something certainly we're interested in. So you can bet that as we're looking into next year, we're turning into a very commercial oriented company across the board and collecting data that supports that story is key to us.

As you know, we've already historically done a lot of work in this regard, largely focused on characterizing the burden of MTM, which we think will be critical to those future payer conversations. And then you combine that with incredible value that we believe we're demonstrating with our clinical data both for patients and their caregivers. And we feel very good about the commercial opportunity as it continues to mature.

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Debjit D. Chattopadhyay, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [28]

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And then on the AT702 program, I understand it's not in the clinic yet. But based on the preclinical data, where do you think this sort of an expression should line up for you guys? And given the relatively smaller opportunity in the first program, the regulatory path forward, does that mimic the exon-skipping approaches in terms of dystrophin expression-based filing? Or the microdystrophin gene therapy-based approaches where it's more functional data?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [29]

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Well, with the 702 program, as we previously shard when we announced the program, we're extremely pleased with what was observed in terms of dystrophin expression of [42] near-normal levels of dystrophin expression across a range of muscle tissues that were sampled in animal studies. And importantly, that's 40% to 100% of normal full-length dystrophin, not 40% to 100% of a 30% size truncated form of dystrophin, which is what one makes with the micro-dystrophin programs.

And that of course is the crux of why we believe we have the potential to be a superior safety and efficacy profile over time and that our approach produces a full-length or near full-length version of the missing protein.

So we believe the preclinical data track very positively and that we look forward to studying that in biopsies in the clinical program as well, and sharing that information as soon as we can. As far as the regulatory approach and the template for future programs, I mentioned earlier we believe we can move very efficiently through the other exons.

As far as what endpoints are appropriate to study for approval, I think this is a very fluid subject frankly in Duchenne. We read everything that everyone else reads but I think it remains to be seen whether the agency will support approval of these sorts of products on dystrophin expression alone, or whether clinical data will be required.

It could actually vary, I think, program to program, depending on medical need even within given exon. So we'll see about that. So it's difficult to know, but right now, we're just intent on finalizing our clinical plan and coming up with a thoughtful approach to generating positive safety and efficacy data and differentiating our program over time as we go.

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Operator [30]

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Our next question comes from Raju Prasad with William Blair.

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Samantha Corwin, William Blair & Company L.L.C., Research Division - Associate [31]

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This is Sami on for Raj. Congrats on all the progress. I had a question jumping off the commercialization strategy for AT132. Are you guys looking to partner with any kind of specialist centers in order to recruit patients?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [32]

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Sorry, to recruit patients for clinical work or to support commercialization? I'm not sure I understand.

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Samantha Corwin, William Blair & Company L.L.C., Research Division - Associate [33]

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To support commercialization.

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [34]

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I don't have a good answer for that today. Honestly, I think the commercial team is actively working on all of these sort of key planning activities. So it's an interesting question. I don't have a good answer for you today but happy to talk more about it in the future, in particular as the commercial team begins to refine our strategy for ensuring rapid penetration of the market.

No surprise, things are moving quickly, but we're particularly focused in efforts to find patients, which is really I think what you're getting at, as well as to continue to build our story of value and preparation through conversations with payers. But we'll certainly have more to share on this in the coming months. So obviously, as we approach the BLA filing and future commercialization.

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Samantha Corwin, William Blair & Company L.L.C., Research Division - Associate [35]

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And then just one more. Did the FDA and EMA seem overall pleased with the current efficacy and durability data to date? And do you think they were just looking for a maintenance of what has been seen previously with a greater number of patients?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [36]

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I think that's a fair conclusion. I mean certainly, you wouldn't have gotten RMAT and PRIME designations as we did, if they weren't very encouraged by the early data. So that was the first step in recognizing that they believed the product has great potential.

And our take away from the interactions was also that, that they see the potential. They're very engaged and responsive. But in the end, absolutely, as we've said in this call and as you just said, I think it's a matter of getting a bit more data in patients treated at the proposed commercial dose and ensuring that we're focused on an endpoint we all agree is clinically meaningful, and gathering those data in as robust a manner as possible.

And none of that is surprise. So we've put together a good plan that accommodates all that and we are confident that it's going to result in a BLA filing mid-next year, as we said. So hope that helps.

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Operator [37]

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Our next question comes from Matthew Luchini with BMO Capital Markets.

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Matthew W. Luchini, BMO Capital Markets Equity Research - Analyst [38]

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A couple from me if I may. So first, on MTM, we've obviously heard a lot about the primary analysis for the pivotal expansion cohort. And I was just wondering if there had been any addition or changes to any of the secondary endpoints that might be worth noting at this point?

And then second question would be on Pompe. Given that you're going to be filing the IND this quarter, can you talk just a little bit about where you guys are in terms of trial set up, whether it's site selection or KOL involvement? Just a little bit of color there would be helpful.

And then last question would be, just as a point of clarification, Matt, since it sounded a little bit like you were hedging. With regards to the DMD patients that are treated with the NCH construct, is the plan to share those data, not share those data, or only share if there's something I guess unexpected or untoward that should come out of them?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [39]

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Glad you asked about the secondary endpoint question on MTM. So through our conversations, I would say that the -- both authorities zeroed in on both the ventilator time -- time on vent as a key clinical endpoint, and obviously, we landed on that as our primary endpoint. But they're also really enthusiastic about achievement of key motor milestones, which is something that we had heard and observed as important also in the SMA clinical, gene therapy clinical trial work. So it wasn't a surprise to us.

And so out of that, we chose to include as a secondary endpoint, the ability to sit unassisted for 30 seconds, which is obviously a basic and really important motor milestone for kids this age. So that is in fact a secondary endpoint. It's something that we had a lot of success achieving in the patient's earlier in the study. So again, it's something we feel very confident we can meet. And we believe it will be strongly supportive.

We also certainly believe in the biopsy data as strongly supportive. Everyone is familiar with the fact that we have high evidence of VCN, protein expression near or above normal levels, and significantly normalized histopathology. And so that's all very supportive data too that's key to the pivotal expansion cohort study plan.

So as far as Pompe, yes, very active on trial preparations. Again, multiple members of the team here have worked on Pompe in different forms and we know the community. And so we've been engaged with the KOLs for quite some time actually. They've been in the background guiding some of our work in the program. And so we feel good about that and look forward to sharing more details about our -- not just the protocol but also operational details. But I believe we'll be able to get up and running efficiently.

And then finally on Duchenne, I certainly didn't mean to sound hedging. I was just trying to be realistic that I think data from 1 patient with -- 1 or 2 patients with a product that's going to be outdated quickly, just wasn't sure how much we'd be able to rely on that and talk about that. But we certainly, if we see something interesting that we feel is important to share with the community, you can bet that we'll share it.

But I just want to be straightforward about, I think, how to think about the program more holistically. And it's likely that the data from our products, manufactured by our process, will be really what we should be evaluating for the future of the program and the safety and efficacy of that product.

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Operator [40]

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Our next question comes from Difei Yang with Mizuho Securities.

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Difei Yang, Mizuho Securities USA LLC, Research Division - Executive Director of Americas Research [41]

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So with regards to ET132, Matt, would you remind us if we were going to see reduced ventilator utilization, typically what time frame are we going to observe that post-treatment? And then secondarily, with regard to onset of action, with the higher dose, do you expect an acceleration onset of seeing this reduction of ventilator use?

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [42]

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When one reviews the data from the study to date, we see evidence of improvement in respiratory function very rapidly, first and foremost in a matter of weeks, through first patient's ability to control their airway on their own to then improvements in the maximum inspiratory pressure test that we've been doing for some time. And then that in turn leads investigators to get comfortable reducing time on a vent.

So there's plenty of evidence from a number of patients that you see improvements and reductions in time on a ventilator over the course of the first 12 to 24 weeks of the study. And so that's why when you look at the data, we're very comfortable that at 24 weeks we're likely to hit this endpoint and to truly distinguish a statistically significant difference from the controls who are, as we said earlier, extremely unlikely to change at all from baseline and the requirement that all patients have at baseline, which is to be mechanically supporter ventilated for 20 to 24 hours a day.

So there's reason to be very optimistic that at 24 weeks, we'll hit that endpoint. As far as the higher dose and a faster onset, what we observed, and it was a part of the decision-making process for choosing 3E14, we did not see a meaningful difference in the safety profile of the 2 doses, nor the efficacy profile when measured by the key clinical measures like CHOP INTEND or even ventilator reduction.

Where you started to see differences was in the tissue, in the biopsies. And you certainly saw a bit higher levels of protein activity. But really, in the histopathology, what we felt we observed was that you got a little closer even to normal over the lower dose and that it seemed to happen a bit faster.

And so that's the only area where I thought we were able to distinguish a difference between the 2 doses, and that certainly contributed to our decision to go with the higher dose. I'm not sure that one could ever see a difference, a meaningful difference when it comes to ventilator reduction between the 2 doses. I don't know that that's practical with that endpoint.

But anyway, we feel really good about the high-dose for all the reasons that I think we've talked about before. And of course, it also has a little bit of an eye towards long-term durability of effect, and that's a goal we all have as well. So anyway, I hope that helps.

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Operator [43]

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At this time, I'm showing no further questions. I'd like to turn the call back over to Mr. Matt Patterson for any closing remarks.

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Matthew R. Patterson, Audentes Therapeutics, Inc. - Co-Founder, Chairman & CEO [44]

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Great. Thank you again, everyone, for your participation and for the opportunity to share our updates. Looking forward to a busy remainder of 2019 and updating you on our progress again soon. Operator, that concludes our call today.

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Operator [45]

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Ladies and gentlemen, that you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.