REGENXBIO Inc. (NASDAQ:RGNX) Q4 2023 Earnings Call Transcript
REGENXBIO Inc. (NASDAQ:RGNX) Q4 2023 Earnings Call Transcript February 27, 2024
REGENXBIO Inc. misses on earnings expectations. Reported EPS is $-1.43 EPS, expectations were $-1.27. REGENXBIO Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, and thank you for standing by. Welcome to REGENXBIO’s Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today’s conference is being recorded. I would now like to hand the conference over to Patrick Christmas, Chief Legal Officer. Please go ahead.
Patrick Christmas: Good afternoon, and thank you for joining us today. Earlier this afternoon, REGENXBIO released financial and operating results for the fourth quarter and full year ended December 31, 2023. The press release is available on our website at www.regenxbio.com. Today’s conference call will include forward-looking statements regarding our financial outlook, in addition to regulatory and product development plans. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted and can be identified by words such as expect, plan, will, may, anticipate, believe, should, intend, and other words of similar meaning. Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties.
These risks are described in the risk factors and the management’s discussion and analysis sections, REGENXBIO’s annual report on Form 10-K for the full year ended December 31, 2023, and comparable risk factors sections of REGENXBIO’s quarterly report on Form 10-Q, which are on file with the Securities and Exchange Commission and available on the SEC’s website. Any information we provide on this conference call is provided only as of the date of this call, February 27, 2024 and we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events, or otherwise. Please be advised that today’s call is being recorded and webcast. In addition any unaudited or pro forma financial information that may be provided is preliminary and does not purport to project financial positions or operating results of the company.
Actual results may differ materially. I would like to now turn the call over to Ken Mills, CEO of REGENXBIO.
Ken Mills: Thank you very much, Patrick, good afternoon, everyone, and thanks for joining us. I’m pleased to begin today’s call with a recap of our recent business highlights as well as an update on our corporate goals. Steve Pakola, our Chief Medical Officer, will then provide an update on clinical programs, and Vit Vasista, our Chief Financial Officer, will provide an overview of financial results for the fourth quarter and the full year ended December 31, 2023. At the end of the call, we’re going to open the line up for questions. Late last year, REGENXBIO began work on a pipeline prioritization plan that enables us to focus our capabilities and resources on large commercial opportunities where product candidates are differentiated, can be expedited, and support meaningful value generation soon and for the long term.
Our priority programs are ABBV-RGX-314 program for the treatment of wet AMD and diabetic retinopathy being developed in collaboration with our partner AbbVie. RGX-202 for the treatment of Duchenne and RGX-121 for the treatment of MPS II or Hunter syndrome. Early on in 2024, we’ve experienced exciting progress for each of these programs. We believe there’s a multibillion dollar potential for the RGX-314, a single injection treatment to become a first-in-class gene therapy in wet AMD, and the standard of care to treat and prevent progression of diabetic retinopathy. Enrollment remains on track with our subretinal delivery program for wet AMD, currently in pivotal trials with an expectation to support global regulatory submission by the end of 2025 through the first half of 2026.
We hosted calls recently with leading retina experts to review our new positive clinical data from our treatment for wet AMD and diabetic retinopathy using in-office suprachoroidal delivery. These events were exciting for us, and today we’re going to be talking about additional upcoming data and events that we’re giving guidance on. Three weeks ago, we focused attention on our rare disease pipeline in two amazing milestones. In Duchenne, we announced the completion of enrollment in Cohort 2 and additional positive interim data from our ongoing trial. We are thrilled to see RGX-202 is demonstrating strong microdystrophin expression across a wide range of patients. And for MPS II, we achieved what I think is a major breakthrough with statistically significant results for our pivotal trial on which we are filing a BLA.
Patients receiving this treatment have continued to show improvement in their neurodevelopmental skill acquisition up to four years, and we recently observed discontinuation standard of care intravenous enzyme therapy. Our recent milestones demonstrate how our new plan is supporting the acceleration in the development of gene therapies and the expansion of value for our shareholders. And today we’re providing some new guidance, as I mentioned, on near term milestones for Duchenne and our treatments for wet AMD and diabetic retinopathy using in-office delivery. Next week, we have plans to share new Duchenne trial update at the Muscular Dystrophy Association Conference being held in Orlando, Florida. Also, we expect to share new program and data updates for the Phase 2 ALTITUDE and AVA trials in Q2 and mid 2024, respectively.
Overall, we’re absolutely thrilled about our status and the progress the company’s made and with the way things have started off in 2024, I’m going to circle back in a bit and talk more about next steps for us, but for now I’m going to turn it over to Steve so he can do a deeper dive on the review of the clinical progress for our prioritized program.
Steve Pakola: Thank you, Ken. I’ll begin with RGX-314, which is being developed in collaboration with AbbVie to treat wet AMD and diabetic retinopathy via subretinal and suprachoroidal routes of administration. RGX-314 utilizes the NAV AAV8 vector to deliver a gene encoding as therapeutic antibody fragment to inhibit VEGF. The anti-VEGF market opportunity is poised to grow significantly as the population ages. RGX-314 for the treatment of wet AMD via subretinal delivery is being evaluated in two ongoing pivotal trials, ATMOSPHERE and ASCENT, which are expected to enroll a total of 1,200 patients in the U.S., Europe and Japan, and we anticipate global regulatory submissions in late 2025 through the first half of 2026. In addition to our Phase 2 Pharmacodynamic Study that is evaluating the same dose levels being used in the two pivotal trials, we also have two ongoing Phase 2 trials that fall under our collaboration with AbbVie assessing in-office suprachoroidal delivery of RGX-314 for the treatment of wet AMD in the AAV8 study and diabetic retinopathy or DR in the ALTITUDE study.
AAV8 is an active controlled dose escalation trial evaluating RGX-314 for the treatment of wet AMD. In January, we presented full six month results from cohorts five and six at the Hawaiian Eye Meeting. Consistent with previous updates, the data presented continued to support the safety profile of RGX-314 and showed a meaningful reduction in anti-VEGF treatment burden. ALTITUDE is the observation controlled study of RGX-314 suprachoroidal delivery for treatment of DR. We’re very excited about the opportunity in DR given the size of this market, which exceeds that of wet AMD, and because we believe this patient population could benefit the most from a potential one-time gene therapy. In November, we presented one-year data from dose levels one and two showing RGX-314 to be well tolerated, with patients demonstrating clinically meaningful improvements in disease severity with reductions in vision threatening events.
We look forward to providing additional updates on this program in the second quarter of this year. Moving to RGX-202 a potential one-time gene therapy for the treatment of Duchenne. RGX-202 is a highly differentiated product designed to deliver a transgene for a novel microdystrophin that includes the functional elements of the C-Terminal or CT domain found in naturally occurring dystrophin. RGX-202 is designed to support the delivery and targeted gene expression throughout skeletal and heart muscle using our NAV AAV8 vector and a well characterized muscle specific promoter. Our AAV capsid also represents an alternative for boys who may not be eligible for other AAV mediated microdystrophin therapies due to age or presence of preexisting neutralizing antibodies.
In February, we presented exciting interim data from the Phase 1/2 Affinity Duchenne trial, demonstrating that RGX-202 continued to be well tolerated with no drug related serious adverse events in five patients at both dose levels. All three patients at dose level one showed robust RGX-202 microdystrophin expression and reduction from baseline in serum creatinine kinase or CK levels, supporting evidence of clinical improvement. RGX-202 microdystrophin expression from the third patient at dose level 1 was measured to be 83.4% compared to normal control at three months, the highest expression seen thus far. Importantly, we have seen RGX-202 activity in every patient and across a broad age group of both younger and older boys. Coming up next week at the MDA Conference, we’re excited to share new program and data updates from the Phase 1/2 Duchenne trial.
We also look forward to sharing initial strength and functional assessment data later this year. Also in February at the WORLD Symposium, we announced that the CAMPSIITE pivotal trial of RGX-121 for the treatment of MPS II met its primary endpoint with high statistical significance. Patients treated with RGX-121 achieved decreased cerebrospinal fluid, CSF levels of D2S6, a key biomarker of brain disease activity to below maximum attenuated disease levels. We remain on track to file a BLA in 2024 under the accelerated approval pathway, using CSF D2S6 as a surrogate endpoint reasonably likely to predict clinical benefit. To conclude, we have made significant progress with data updates and trial progression across all programs in our pipeline.
Lastly, I’d like to thank the patients, families, clinicians and patient advocacy representatives who have supported all of these programs. And with that, I turn the call over to Vit to review our financial guidance.
Vit Vasista: Thank you, Steve. REGENXBIO ended the quarter in year end on December 31, 2023, with cash, cash equivalents and marketable securities totaling $314 million compared to $565 million as of December 31, 2022. The decrease was primarily driven by cash used to fund operating activities in 2023. R&D expenses were $232 million for the year ended December 31, 2023, compared to $242 million in 2022. The decrease was primarily attributable to clinical trial and manufacturing expenses for ABBV-RGX-314, resulting in an increase in development cost reimbursement from AbbVie under our eye care collaboration. We expect a balance in cash, cash equivalents and marketable securities of $314 million as of December 31, 2023 to fund our operations into the second half of 2025.
This cash runway guidance is based on the company’s current operational plans and excludes the impact of any payments that may be received from AbbVie upon the achievement of development or commercial milestones under our RGX-314 collaboration. With that, I will turn the call back to Ken to provide final thoughts.
Ken Mills: Thanks, Vit, thanks Steve. 2024 our plans are intended to generate significant value for our shareholders as we ensure that resources are allocated to our most valuable product candidates and to accelerate the development of these candidates. As outlined here today and supported by the press release announcements, we’re motivated to expand value by addressing important unmet need in patients. We plan to achieve this in our eye care partnership with AbbVie using our potential one-time treatments by sustaining vision, health long-term and overcoming clinical challenges of managing retinal disease. Our operational goals with AbbVie are directed at completing work and assessments needed to support initiation pivotal trials for RGX-314 using in-office suprachoroidal delivery and completing enrollment of our ongoing pivotal trials for RGX-314 using sub-retinal delivery, which underpins our filing strategy for global regulatory submission by the end of 2025 through the first half of 2026.
Initial efficacy data from the first patients treated with RGX-202 is enabling us to accelerate this program. Duchenne is a market where there’s a large unmet need for new therapies and that is capable of supporting multiple gene therapies, and we believe RGX-202 has a unique, differentiating set of features that support its potential to be a best-in-class product. We’re taking steps to initiate a pivotal trial for RGX-202 this year. Our recent top-line pivotal data supports that we are meaningfully changing the course of disease in boys with MPS II by restoring their missing gene function. Based on these data, we’re working to file a BLA as quickly as possible. By the end of this year, everything in our pipeline should be initiating pivotal stage, fully enrolled at pivotal stage or under a filed BLA.
As a result of these recent updates and upcoming near-term milestones and milestones throughout 2024 announced today, we believe REGENXBIO is well positioned for success this year and in the long term. So thanks everybody for your time today. We hope that you share our enthusiasm about these recent updates about the impact that our treatments and treatment candidates are having on patients, and we also ask that you join us later this week in honoring Rare Disease Day. With that, I will turn the call over to questions. Operator?
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