PYC Therapeutics Ltd

ASX:PYC

Earnings Call Transcript 2022-Q4

[Rohan Hockings, executive]

I think we might make a start. So hello, everyone, and welcome to the PYC Therapeutics First Quarter Investor Call. My name is Rohan Hockings, and I will be your host for this morning's call. Before we begin, I am required to inform you of 2 things. Firstly, today's investor conference is being recorded. So just to let you all know that there is a recording occurring and it will be made available after that.

And secondly, to read the following safe harbor statement reminding you that today's discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in our filings with the Australian Securities Exchange. As such, actual results may differ materially from what we discuss on today's call, and the company disclaims any obligation or intention to update these statements in the future.

With the formalities out of the way, we will begin the content proper. So we have three primary objectives for today's conversation. The first one is to give all of you an opportunity to ask any questions that you have directly of the company, and we will make sure that we answer all of those as best we can. The second one is to share with you some of the great excitement and enthusiasm that is building within the organization. And the third one, I think there will be a lot of focus on the company's lead program as we progress through the regulatory engagement and into first-in-human studies and rightly so, that's very exciting. But I also want to give you an insight into what else is going on in the company because there is an awful lot happening within PYC right now. So I just don't want the limelight and the focus on the lead program to detract from all the other things going on.

We will run through -- and in terms of the format for today, for anyone who's new to the story, we'll give a brief recap and introduction to PYC Therapeutics. We're going to then work our way from an outside-in perspective. So we'll first have a look at what's going on in life sciences generally, with a particular focus on the U.S. because that's where it's really driven from. We'll then look at how that's informing what's happening within the domain in which we play, which is the RNA therapeutic space more specifically. And from there, we'll transition to PYC within the RNA therapeutic space and a pipeline with you.

So we'll go program by program, and we'll have a look at what progress has been made since we last spoke to you at the AGM in November. And in particular, what should you look out for in the forward view for the remainder of the year. And here, remember the aspiration that we spoke about at the AGM is that the company is looking to put 3 first-in-class and potentially disease-modifying drugs into clinical development, so into human studies before the end of next year. So it's a very bold ambition. We know through that exactly where we need to be today and also at the end of this year in order to set the platform for success next year and realization of that goal. So we're going to walk through what you should be looking out for as we progress through that.

To give you just a sense of the answers to each one of these different topics that we're going to address, so you can structure your thinking before we get too deep into it. And for anyone who might have to leave early, PYC makes precision medicines for patients who have no treatment options today. I think most people are familiar with that now. We do it as part of the broader life sciences industry, and it's been a very, very grim time for anyone who's been following the investor updates for the course of the last 18 months at least, it hasn't been a good time within the industry. The macro trend has been very heavily against. And what we're seeing now is that things are plateauing at the bottom.

So the American subscriber is the green shoots, the European say it's not getting any worse. So we will stick to the European camp for now. But at the very least, it looks like the worst of it is over, which is good actually from an investor perspective. Not so good if you're an existing investor in PYC, having written out the downtime, but certainly good if you're looking at coming into the story in terms of there's only one way it can go from now. The tide is set to rise. It's a question of when, not if.

In terms of the RNA therapeutics, specifically and RNA therapeutics for monogenic diseases. We're going to talk a lot today about genetic validation of the target. This is a particular subset of the industry that we play in, and the macro trend is very strong for us. it's a very, very good time to be an RNA therapeutics company with a delivery technology.

We'll have a look a little bit at some of the commercial corporate elements of what's been going on in the industry with a focus on 2 transactions that occurred very late last year in December. And then we're getting into the pipeline review, RP11. I think people have a pretty clear understanding. We are in the regulatory engagement window. We have filed an investigational new drug application with the FDA. We're expecting a response from the FDA in early March. If we are successful there, we are organized and set to go in the execution of a clinical trial. We're currently anticipating first patient enrollment in April. So very, very quickly getting into the clinic, assuming that all goes well on the regulatory pathway.

From there, we will largely progress through a single ascending dose study in the RP11 program, which will give us an inferred safety insight on the acute phase, what is likely to happen in the human when our drug is administered to that patient's eye. So it's a very exciting time there. In the second program in ADOA, you're looking roughly a 12-month gap between the first and second programs, which means that we're looking to file an IND in the first half of next year in relation to that program. What happens between now and then is largely a selection of the specific candidates that we are going to progress, so finalization of the drug. Then we go through a fairly well pre-defined process of manufacturing that drug to a very high standard. So we come to GLP toxicology studies, or the non-human primate monkey toxicology studies that largely form the basis of the IND submission. So the second 12 months is pretty well defined, the actions happening at the front end, finalization of the molecule and release of the data supporting that drug.

And then we move to a second target [indiscernible] the program, a drug for a neurodevelopmental disorder that is also going through some very exciting developments right now. And what we're looking at there is the selection of the chemistry that we are going to use in that drug. We'll talk some more about that in detail because it brings a very nice portfolio diversification element to PYC. We will open up for Q&A at the end of the session, but I'm also going to pause as we finish each 1 of these subsections and give you a chance to ask questions as we go through.

I think many of you are familiar with what the company does now. The company has a platform technology on which it is building precision medicines for patients with severe genetic diseases. And I think the key thing to understand here is we are looking to create life-changing therapies for these patients. So we don't pick diseases where the impact on the patient is mild. We operate in the domain of very severe diseases in these patient lives.

We also operate in a very specific space or subdomain of the genetic diseases. We focus in particular on those diseases that are caused by a mutation in a single gene, and we're going to go into the reasons for that very shortly.

So if you wind back the clock about 18 months, the industry was very much focused on platform technologies, things that can scale very quickly across multiple indications because we were in a risk off-base where the cost of capital was low and people were really looking for blue sky opportunities, and that has changed very drastically. What's happened now is that people are very much more focused at the asset level. So it's lovely for our company that we have a hedge across. Yes, we do have an underlying platform technology, but we have now progressed far enough down the definition of the individual assets that are being built on that technology, but you can get a very good sense of what is the profile of that particular drug program or asset.

PYC's technology takes an existing class of drug, and it makes it better. So many of you will be familiar with the work that's been done in the last 30 or 40 years around RNA drugs. RNA drugs have been so incredibly attractive to the industry because they offer precision and potency. So there's been a huge amount of attention that has been devoted to RNA drugs, but they've had a relatively limited profile of success within that 30- to 40-year window. And the reason for that is they have an Achilles' heel.

Whilst they are very precise and very potent, they don't cross the cell membrane to get inside the cell where their targets reside very well. They have very weak intrinsic cell-penetrating properties. And that's a big problem for a drug that is only active when it's present on the inside of the cell. The great development progress that's been made that is creating the strength of this macro trend towards RNA therapies right now is an enabling technology called drug delivery. And this is coming in different shapes and sizes in different forms. Many of you will be familiar with the lipid nanoparticle that has been wrapped around the RNA drug that forms the basis of the COVID vaccine. So the COVID vaccine has really drawn a lot of attention to this concept of facilitated delivery as an enabling technology for RNA therapeutics. But this is something that's been going on for years prior to that. A lot of progress have been made even before the application of the technology in the pandemic.

There's something very interesting here in relation to probability of success in the clinic. If you look at the probability of success in the clinic as defined by modality, a naked antisense oligo, or RNA drug, has the lowest prospect of success of any therapeutic modality. And as you transition to a facilitated delivery RNA therapeutic, you move to a modality with the highest prospect of success in clinical development. This is important. And it's a distinction from the point that we're going to talk about shortly in relation to the validation of the target. Here, we're not talking anything about the disease at all, rather just what is the modality or the nature of the drug that you are using to pursue that target. And we are also operating here, in the very lowest risk or highest propensity of success domain within the industry. So that's what PYC's platform technology is, what you see here in pink and orange, it's an enabling technology that carries a beautifully precise and potent class of drug across the cell membrane to enable it to interact with its target.

And if you think about the fact that some of these drugs have been successful in entering market and rescuing disease processes, some of them very successful, and we get somewhere around 100x as much drug inside the cell with the conjugation to a delivery technology. It gives you a sense of the scope of the number of diseases that we are bringing in right now, and that is what is driving the excitement behind these drugs.

Four key elements underpin the company's strategy. We're not going to talk about the first one here because that is the essence of all of it. We're going to treat that as a special stand-alone proposition. So here, what we'll look at are a faster path to market. This has got 2 components. What we're focused on in the page at the top here is a faster path through clinical development. The prospect of 2 clinical trials and not 3, because these are patients who have no treatment options today and the imperative or the urgency of getting drugs to these patients quickly. That's terrific.

But what you also see, and what is not on the page, is a very much expedited front end for the drug development process. The industry has moved to around about an 18-month time line from selection of the genetic target to submission of the IND. That's quite incredible. That's compressing what is usually a 5- to 7-year journey of drug discovery down to an 18-month time frame. PYC is not quite there yet. We've got some improvements in an operating model still to go, but we are really also dealing with the added complexity of the platform technology. So it's adding a benefit to us in clinical development. It's giving us that very high SP success. But it takes a little bit longer in the nonclinical development to get the combination of the 2 elements of the drug right.

From an investor standpoint, the fact that we are pursuing markets that don't have any available therapies for patients is really, really critical, because it makes it very easy to understand. You're not thinking about what's the percentage share, competitive share of the market that the company is going to get. You are much more directing your attention to the question of how quickly are we going to embrace the whole market opportunity. And we see that as a company, we get inbound e-mails every week from patients with the different indications that we're pursuing, asking to be involved in the clinical trial. Many, many emails, many, many patients. It's a very good indication of just how focused these patient populations are on the creation of a disease-modifying therapy.

What you typically see, and I think SPINRAZA is a very nice example of a naked RNA drug for a rare disease, they hit 85% of the peak market penetration within 18 months of launch of that drug. So they've very, very rapid uptakes once they reach market. And I think everyone is familiar now, which hopefully everyone is getting familiar, these are very expensive drugs. The reason for that is the industry has decided to purposefully incentivize drug makers to focus on rare diseases. Because whilst individually rare, there are 400 million people worldwide who have a rare disease, almost 7% of the population. Collectively, they are very common. And they were a neglected patient population.

I think the industry is also aware of the fact that a lot of the innovation in the industry occurs in the context of these rare diseases. And yes, we are going to protect at very high pricing the rights of those drug developers in those specific markets, but the enabling technology is then available to accessing the non-orphan indications. You see it very nicely in the context of, again, the COVID vaccinations. So it's important that we get our heads around those.

I've been banging on for years about the importance of genetic validation of targets. It was the underpinning of the company's strategy 4 or so years ago when we set about the journey of making our own drugs. And I'm really pleased that the limelight is very much drawn to it right now. There's a reference here that I would strongly encourage all of you to have a look at. It's on YouTube, the Atlas Ventures 2022 year-end review. It's a great overview. This is one of the smartest venture capital investors in the world talking about what is happening within the industry. And so you'll hear not just the macro, but at around the 30-minute mark, if you want to skip ahead to that window between 30 and 32 minutes, there's a discussion of the power of genetic validation of the target, and it's brilliant.

It's really, really good. I've got the highlight quote here. When you're following Nature's lamppost much, much higher probability of success. There's nothing -- that dot, dot, dot is a pause. There's nothing in between those 2 sentences in the direct script. So this is one of the world's smartest venture capital investors, giving you a clue as to what they're looking for in their portfolio companies. And it's the underpinning of our strategy that we have adopted many, many years ago, but there's much more attention coming to it now.

And the reason for it is the way that most people value life sciences companies is through a risk-adjusted net present value. You look at a relatively simple calculation of the number of patients you think you're going to reach, remember underserved by a competitive landscape. You multiply that by the median drug pricing and you end up with a very large market. That's great, but it's actually the removal of risk and the probability of ever reaching that market that we are directed to as a company. Are we going to see a clinical efficacy signal, human safety first and then human efficacy.

So that means that, that little R that sits in front of the NPV is actually the fundamental driver of the aggregate number that you're getting out of that calculation. So if you're multiplying by industry standard probabilities of success, you're shrinking that number a long way. And if you're adopting the multiple on that probability of success that is associated with the disease caused by a single genetic mutation, the highest form of genetic validation, you are ending up with a very different number at the back end to what you get if you're looking at the industry standard figures.

And just to recap, we mentioned it at the outset, what the company's ambition. We're not looking to put one drug into clinical development. We're looking to put 3 drugs into clinical development, as part of Wave 1 of what the company is about. We are already working on Wave 2, and we are turning our minds to the strategy that will underpin Wave 3 of these therapies. PYC will look to file an IND to enable a clinical study to progress in one new indication every year from this point on, with the exception of next year where we're looking to achieve 2.

Very, very bold ambition for the organization, and it's happening in the context of a hyperdynamic wider industry. Whilst we are playing the game, the goalpost is also being shifted. And we'll have a chat about that shortly as we move to what's going on within the wider industry. But I'm going to pause there just to see if we have any questions that have come through or any in the room. Just one second.

[Unknown Analyst]

Very basic, Rohan. In your introduction, you talked about the market over the last year or so. I'm presuming that you just mean the financial markets, which have collapsed in our industry. But the enthusiasm for what we're doing, et cetera, et cetera, is -- the green shoots are there and growing, and nothing's changed. Is that correct? I haven't missed anything in the industry that from.

[Rohan Hockings, executive]

Look, if you've missed it, I've missed it, too. It's my understanding as well. So it's quite strange. I mean I look at it and you think about how do we assess the value of what we're doing. We are always very much tied to the intrinsic value of what we're doing, which is a function of the number of patients who have the disease that we are pursuing, the pricing per patient and then the probability of reaching that market. And there's nothing that has changed. I mean in 3 of those variables other than we are getting closer to the market, and we are removing risk. So...

[Unknown Analyst]

I can handle the stock market actually, we've been there for a long time.

[Rohan Hockings, executive]

Yes. Yes. So it's -- I mean, it's pretty radical, you look some of our nearest peers had peak market cap size of USD 3 billion. and they've dropped to USD 300 million, USD 400 million. It's been dramatic, really dramatic. Some of it -- I mean, you can't look at it in an individual anecdotal case level. It's happened to everybody. The index is down. But that's in the context of each of them generating their own data.

So I think it's largely driven by lots of enthusiasm for the sector on the back of what happened in the pandemic. And then a lot of generalists starting to understand that they didn't maybe have the full depth to understand the industry, and then they have moved out en masse at a time where the cost of capital was rising significantly. So companies that are cash flow negative and have a long time before they start generating revenue were punished very badly, yes.

And so it's very strange. You've got this terrible commercial macro trend but a very strong macro trend within the life sciences industry towards the RNA therapies. Yes. we've got 1 question, lots on the plate, but how can you afford to do it all, options, cap raise, investors deal.

Yes, a good question and the commercials always come up, so we may as well deal with it, get it out of the way upfront. Well if you look at the company's update before C that went into the start of the current quarter, we had $17 million in an anticipated R&D rebate of just over $4 million. I'm pleased to say that we received the R&D rebates so that cash has now combined, and we have $21 million in cash. And we are anticipating roughly around a $10 million R&D rebate for the fiscal year that we're currently in.

We're now 8 months through that year. So 8, [ to us ] all the way to our entitlements in that regard. So we've got capital reserves, cash and receivables of around $30 million, which is funding for us right now on a net basis of around 12 months. So we've got a 12-month window in which to look at all of those options that you are putting on the table there, and we really need to look down and look at the relative attractions from an existing investor base perspective in ensuring that we have the access to the capital to do what we want to do.

The nice thing about the RNA therapies and given that we have removed a lot of the risk or shifted the risk from the clinical trial phase, where does that risk go, it comes into the nonclinical window. So it actually means that you can remove a lot of risk in these programs in the early part of development, and that is the much cheaper part of development to turn your attention to. So it fits very nicely for us as a company. The progress that we're making, the anticipated milestones that we've got in the very near term, as in the second quarter, are likely to have a material impact on the way that the outside world use the value of what we do. So hopefully, a comprehensive answer to what we've got going on there.

We've had a little bit of a chat about the trends in the industry. I think one thing that is probably underappreciated is just how dynamic life sciences is. And so if we take this week as an example of different things that are changing in the macro environment, just in the macro, not inside PYC at all. On Tuesday, we woke up to a report out of the University of Oregon suggesting that they had engineered the genome of a monkey to give that monkey retinitis pigmentosa. And that actually the symptoms that, that monkey manifested with very closely resembled or recapitulated the human disease process, which is quite an extraordinary development.

This is the power of monogenic diseases now going the other way. Not probability of success in the clinic, everyone is trying to shift the gauge on the likelihood of success in the clinic into the nonclinical setting. So we have now -- not with PYC but we collectively, as humans, have made a model of a human disease in the species that most closely resembles a human that manifests as the human disease.

Now it's not RP type 11. So it's not directly relevant to PYC in that context. But this is pretty incredible stuff that is occurring now. You can imagine the power of getting all of your nonclinical readouts, effectively, all of them in a single setting: tox tolerability, dosing interval, amount of drug in the target organ and whether or not we are correcting the phenotype. You can actually measure many of the same endpoints that you'd be looking at in the human species in the nonhuman primate.

So that's what I mean by the risk is now shifting left. People have cottoned on to the value of these monogenic diseases, not just for the enhanced prospects of success in the clinic, but how can we use that to drive the nonclinical setting to give us an informed answer as to whether the drug is going to work. So that's pretty wild.

On Wednesday, a paper was released that suggested that it would be very attractive for a precision therapy, a gene therapy, either a DNA therapy or an RNA therapy, to be directed towards neurodevelopmental disorders. And they called out Phelan-McDermid syndrome as one of the particular examples of a drug that is crying out for a potentially disease-modifying therapy right now. And they gave a very lovely detailed manuscript of how to design an RNA therapy for Phelan-McDermid syndrome. So very, very close to home in what we're doing.

And then this morning, I read that out of the Broad Institute, a company that is focused on a delivery technology and enabling platform has just raised seed capital of in the order of AUD 0.25 billion, USD 193 million just to get off the ground. Things are changing all the time, all the time. And we need to look at what's going on in the outside world, which parts of it are relevant for what we are doing internally and how are we going to respond to those.

But everybody needs to understand there is a very, very strong desire to change the course of human health. And it's driven largely in America, and it is supported by enormous raise of capital. And this is the field with which we are competing. And we have to remain relevant in that context, keep up to date with what's going on, as well as differentiating between signal and noise because there's a lot of noise in life sciences as well for those same reasons. So we've got to discern which parts are relevant for PYC, what are we going to do in response to them, but not get carried on with the hype and be very focused in terms of what we're doing internally.

So that's just an illustration of the hyper dynamism that's occurring. We mentioned at the outset from a commercial perspective, it looks like the worst is behind us. And so that's nice. It's just nice to no longer be in free fall. And if you look at a couple of the IPOs that have gone through in the U.S., they're getting very strong aftermarket performance now. Now this is very, very small numbers of companies because not many of them are finding the opportunity to list in the U.S. It's still very, very difficult from a commercial environment. But it looks at least like it's not getting any worse. And so a quick a question then of how long it takes for things to turn around. So we've got a question here.

[Unknown Analyst]

Got away with one set of question. Can I ask another?

[Rohan Hockings, executive]

Yes, sure.

[Unknown Analyst]

Is there -- maybe unanswerable. Is there any chance at all that something can come out of left field and completely -- I cannot put it...

[Rohan Hockings, executive]

Wipe out PYC?

[Unknown Analyst]

Yes, yes. That makes relevant, if you will.

[Rohan Hockings, executive]

You're loathe to never say never, but it's highly unlikely. And actually, this is where -- this is what I mean by we've got to make sense of it. So we set the delivery technology as an example. If they've got a better delivery technology than PYC, we've got a couple of questions to answer.

Is there anything we can learn from that delivery technology that we can incorporate into ours, keep the benefits of our delivery technology but exploit the benefits of theirs. And if the answer to that question is no, it's a question of, is there delivery technology relevant to the target tissues and cells that we are pursuing? And if the answer to that question is yes, it's whether or not we need to license in that delivery technology to combine with our RNA therapy to create a better drug. So those would be the kind of implications that we'd be looking to discern.

Given that we've got this hedge across the delivery technology and the RNA drugs, and we'll come to the conversation later, there's actually a lot of diversification between our different assets. We're not all in on any one of them. And there are sufficient differences between them, both from a biological perspective in the underlying disease, but also the molecules themselves that we are putting forward. But we're not really at risk on any one outcome. It's more 3 independent shots on goal in very attractive markets.

So for us, it's much more about making sense of what's going on in the macro and working out whether there's anything that is relevant for us rather than fearing the risk of being wiped out entirely. And I think the other dimension to it that is probably quite important to get ahead of -- because the field is moving so fast, we've got to be -- we can be a part of those enabling technologies ourselves.

So we -- things like the power of the genetic validation can inform changes that we make to the front end to continue to benefit from the macro trend towards the RNA therapy. So I don't think so. I think it's such a good time in the sub space that we're in, that there's nothing that's likely to really push us completely out of the competitive landscape.

Sorry, one other question that's come through online. Yes. So we've got a question coming through the chat. You mentioned your drug delivery mechanism and its importance. I see in the literature that there have been issues with AAV carriers in terms of liver and nerve damage. Can you please comment on your carrier and its safety?

This is a very good point. And I think it's one of the issues in the competitive landscape that we've been quite focused on and the reason that we stayed away from viral delivery vectors. If you look at the literature, not just AAV, but viruses generally, carry some very significant safety concerns. Firstly, because they're immunogenic, they listed an immune response. And secondly, because of the risks of integration with the human genome.

Now AAV specifically is supposed to be what they call a non-integrating delivery technology, but we know that it does, in fact, integrate. And actually, that's the underlying basis in particular, of the liver damage that you are referring to here. The extent of the safety concerns go well beyond those. And so the answer in terms of the comparative assessment, because we are using a very, very small fraction of a post-complete viral genome as our delivery technology, we don't see any evidence of immunogenicity in the screens that we do in the nonclinical setting. And we haven't seen any evidence of adverse tolerability related to the delivery technology in our GLP safety studies to date. You guys have seen the data that's come out there.

So that's the fundamental distinctions. We don't see the same issues with our delivery technology because of the different nature of our delivery technology in that context. The other thing that I think is particularly nice from PYC's perspective is remember that our drug, at least the first 2 indications that we're pursuing, we have a localized delivery environment. So we're delivering drug into the eye. And when we look in the nonhuman primate species as to whether any drug has leaked into the systemic -- system into the circulation, the answer is no. The presence of the drug is below the limits of concentration. So if it's there, it's there in such small quantities that we're not getting what we call an off-target distribution to the other organs. So the effect is likely to be limited to the eye, which is very encouraging there.

All right. Back to the industry trends. A further example here just of the extent of the difference between what the industry is doing and what those who focus on monogenic diseases are doing. And I think this -- again, we've touched on the power of the genetic validation. But I think the last sentence in the first quote here is critical. I'm sorry, I just got rid of it, or I'm going to refer to it. It's -- this is a paradigm shift. We're not talking about a subtle change in the probability of success. We are talking about a fundamental change that drives what is a very different lens through which you view the company that is required compared to what goes on in the industry as a whole.

And the reason for that, I think you can get your head around what's going on, if you know that this is the specific gene that is causing the disease and exactly what is happening within that gene, is it expressed too high or too low, that is resulting in the phenotype of the patient's disease process, then you know exactly what you need to do to fix it. It's a very precise thing that needs to be done inside a cell, and we are using a very precise technology with which to do it. That creates a very different paradigm.

And I think this point is interesting as well, particularly for investors in PYC as we transition to a combined Phase I/II study in humans. The first-in-human studies, they're a good place in the value chain to be. And I like the quote, it's the CEO of Novartis describing why they are no longer interested in the outcome of Phase II assets. They don't want to play in the late clinical space anymore because they don't want to buy a drug that's had 90% of the risk removed and benefit in the final 10%. They want to be involved in the journey of the value creation, of getting the human safety and the efficacy signals and enjoying the fundamental rebate that comes from vastly increasing the piece success.

And if we are right here, and I think you see increasing evidence, we've given you some references to go back to and have a look at the power of this genetic validation and how far it's changing that piece success, you're effectively benefiting from that tailwind in PYC for free based on the valuations that we're attracting relative to peers. So it's the combination of these 2 that is starting to make things look very different from the investor perspective.

All right. Any questions on what's going on in the industry as a whole. I don't have any coming through from the chat form. We've got one in the room, one moment.

[Unknown Analyst]

Rohan, do you see that there is the opportunity to out-license the transport technology that you have? You see that, that scenario something that the company could achieve?

[Rohan Hockings, executive]

Yes. That's a good question. And I think a question in the minds of a lot of investors is, look, if you're talking about this paradigm changing delivery technology, and it's great that you've got a bunch of internal opportunities for its exploitation. But what about out-licensing at generating some revenue, proving that you're on the right pathway? The answer, unfortunately, is it's a little bit more complex than that.

Because the nature of the delivery technology is determined by the type of cargo that you are trying to deliver. So you need a very different delivery technology to deliver a pizza to avail a pay. And so that's the limitation. You really need people who are -- firstly, we've chosen to be in the RNA therapeutic space. So all of our data, all of the beautiful validation of our technology occurs within RNA therapy as a cargo. So that's going to be very attractive to people within the RNA therapeutic space, but not so attractive to people who are operating in a different domain.

And then if you look inside the RNA therapy space, most people are working with a backbone chemistry that carries a negative charge. And so if you link up a backbone chemistry that has a negative charge with a positively charged delivery technology, they're going to neutralize one another and prevent either part from operating as it's intended. So you've now ruled out the vast majority of the RNA therapeutic space as well.

If you look at those who are leveraging the safety of the morpholino backbone, morpholinos don't have broad intrinsic cell-penetrating capability. So a lot of these companies have already got their own delivery technology, and they are a genuine like-for-like competitor with PYC, apart from the fact they've chosen different applications to apply their technology.

So if you look at -- a very good example is Sarepta. Lovely proof of concept of the technology. But in conversation with them, it was very clear that if their delivery technology was successful in the clinic, they were not coming back to have another look at getting a better one. Enough is enough. We've got it. We don't want to start the program for a third time. It's only if we run into a big problem in the clinic, that we would look to license your technology.

And so the interesting thing there was, what are we now cheering for? Them to fail and want to look to do a licensing deal, or for them to succeed and clinically validate our technology? And I think both from a patient perspective and actually from a PYC fundamental perspective, far, far better for us that they went and got the validation of the PPMO technology. And now what you see is others coming into the space.

So you see PepGen. They've got their own CPP delivery technology. You now see Entrada. They've got their own CPP delivery technology. So the companies who are in the space now oftentimes have their own modality. Now you could say, woe is me, we're not doing a BD deal. I think you've got to look at it and say, hang on a minute, everyone is coming in this space because it's a very hot area. And just be happy that actually, the value then is in the molecule as a whole and what we can do in the specific indications that we're pursuing. But hopefully, it gives you some color as to why BD around the delivery technology itself hasn't been such a focus.

We're probably more interested from a BD perspective in the assets as a whole and regional licensing deals, as we've spoken about previously. Especially now because the value of those assets is getting a lot higher. And so that's what you should be looking for is, okay, if this is all true, if we are seeing a very, very strong macro trends to the RNA therapies and facilitate delivery of RNA therapies, are we seeing evidence in the industry of people being willing to cut big checks for early-stage assets? That would be the confirmatory proof that we're looking for, right?

And if you have a look in just the last month of last year, alone, 2 of the companies that we speak about have done big deals at the asset level, not around the delivery technology. One of them doesn't have a delivery tech. That's Wave Therapeutics licensed for USD 170 million upfront, a preclinical program that then comes with milestones and a royalty that sits at the back end of that. And that was 1 of 8 candidates that was part of that deal. So that's $170 million per candidate upfront in cash U.S. dollars for a preclinical asset. Yes, very, very powerful, and that's a naked RNA therapy. So that's a lovely indication.

If you look at the commentary around that transaction, that's GlaxoSmithKline, trying to get a seat at the table in the RNA therapeutic space. So that was nice to see. But I think even better for us was the Vertex deal with Entrada, USD 250 million upfront in cash for an asset that's 12 months behind RP11 or more. Early, early preclinical development. And sits in a competitive market space in a rare disease. So that's the third, possibly fourth RNA therapy for a disease called myotonic dystrophy that was the subject of that transaction. And again, milestones and royalties sitting at the back end.

So you are seeing in the industry deals being done that are very much attracted to exactly where we're at right now. And it's for the reasons that we've spoken about.

Okay. We've got one more question from online. Are there any plans to collaborate license out VP-001 to pharma as Phase I completes? This is a good question and it relates back to the earlier one in relation to sources of capital for the company.

The answer is informed by what's happened in the broader capital markets environment. So as the valuation of the parent company has come down, the appetite on the part of the company to look at BD or licensing deals as a source of revenue has gone up. And it should, right? So whilst it's important not to farm ourselves out of the downstream value associated with these assets, particularly because we are not seeing the value of those flow through to the parent company level. The question is can we get it recognized at the asset level? It would be preferable for us at this point to be entering into the space of doing a transaction of the nature that we've just spoken about.

So yes, we are looking to do that. I don't think we necessarily need to be in clinical development. As we've spoken before, preclinical development is a very attractive space for people to be doing transactions. The clinical window -- and as soon as you're into a Phase I, Phase I/II combination, as you've just seen from the -- quite from the Novartis CEO, that's a very, very attractive time. That's a window where you're going to get a lot of competitive tension around those assets. Which is why we have been so focused on becoming a clinical stage company.

So yes, we are looking at the opportunity in particular, again, in relation to regional licensing rights to retain exposure to the assets in the particularly attractive markets, but to bring on a partner who can join us on the journey and provide additional capital for PYC.

We've got another one that's coming in. Would PYC consider accepting a favorable takeover offer? I think that would depend on the definition of favorable, in that context. We look at anything that comes across the table. And if the terms are particularly attractive, we will do what's in the best interest of shareholders. But I think importantly, we're not dependent on anybody else. We're very happy pursuing the progression of our assets towards markets, and we are now in the critical window that is going to inform that value uplift for shareholders. Human safety, human efficacy, it's coming really soon.

Okay. So the program details. We just go now one by one -- time as well 40 minutes, so quite a long way through. So I might go reasonably quickly through where we've got to and then throw it open to the floor for questions. We won't spend a long time on VP-001 because I think it is quite straightforward where we've got to.

But just a quick reminder of why we are doing this, who we are doing this for: The patients who are losing 40% of their quality of life because they have a progressive and irreversible blinding eye disease and no treatment options. That's who we're doing it for. There's a significant patient population in Perth, there's a larger patient population in the East Coast. There is an even larger patient population in the Western world.

We've spoken before about the size of those markets from a commercial perspective. Looking at the orphan drug pricing here, you can see that as soon as you hit a patient population of around 7,000, you're into the $1 billion plus market space, which is small by industry standards, but very, very attractive in the context of first-in-class assets with a single genetic underlying cause.

I go through the other dimensions there. Where is this asset heading and what you should be looking for in 2023? I think we know the short-term objective is the clearance from the regulator that we have done everything necessary to support the proposal in relation to the clinical trial design that we put forward. And if we are successful there, we'll progress through what they call a single ascending dose study.

And so what that means is we will start with a low dose. We will dose 3 patients with the drug, and we'll wait a time period of 4 weeks to ensure there are no acute tolerability issues. We will then hold the meeting of our Data Safety Committee and will request approval to progress the dose escalation to a new dose. And we'll dose another 3 patients and we'll wait 4 weeks, and we'll take the data on the acute tolerability back to the Safety Monitoring Committee, and we will ask for approval to escalate to the high dose.

And once that's done, we'll follow those patients for a period of 24 weeks to make sure that we're looking at the chronic tolerability window as well. And then we will convert to a multi-dose study. We'll take likely 2 of the dosing cohorts. And a third group of patients who I'm not aware that they're not receiving treatment, but in fact, they're not receiving treatment. So that will give us a placebo control.

And that will then be part 2 of the study. What the results of that study, plus the natural history study that is already underway will inform. If we look at the natural history study, what you're seeing there is how quickly does this disease progress in the absence of treatment. And what you'll be comparing that to is how quickly does this disease progress in the context of treatment. And from the comparison between those 2 studies, that will then inform how many patients we need to recruit into the pivotal study, the registrational study and what the design of that study looks like depending on the end points against which we're seeing progression or otherwise of the disease.

And that will then form a conversation with the regulator to make sure they are happy with that for the new drug approval application that sits at the back end of it. and that will be how we design the pivotal study on VP-001's part of the market, assuming that we are successful.

Please feel free to send any questions through -- any questions on RP11.

[Unknown Analyst]

Well, am I right in assuming that the use of this where you're developing, will prevent degradation in sight? Or will it improve the sight of those that already have lost some of their sight?

[Rohan Hockings, executive]

It's a very good question. I think it's -- the answer is complex, unfortunately. But I think it's safer to start with the latter element of what you just described there, which is arresting progression of the disease. Now in RP11, specifically, and again this is part of the strategy from several years ago, that is a monumental achievement because this is a slowly progressive disease. So whatever visual function the patient has at the time they start treatment, we would be looking to preserve that.

And the interesting thing here is if you look at the patient population present with the disease in early childhood progress through to legal blindness in the fourth or fifth decade of life, but not completely blind until the sixth or seventh decade. That means that it should be a very, very high conversion ratio of the addressable patient population to the eligible treatment population. So we're going to get nearly all the patients, if not all, which is very encouraging. And that, if we can preserve the vision that they've got, even if you get a face shift to the right and you give people the functional vision above legal blindness threshold for an additional decade or 2 decades, this would be life-changing for those patients.

The really intriguing thing is that in the gene therapy for another form of RP, they actually saw an improvement in the patient's vision. And the positive reason for this, that no one is able to prove at this point, the theory is there are some cells in the retina that are sick enough to have opted out of processing the visual signal. They're so unwell that they can't function, but they're not yet dead. And so if you can reach them with the drug and restore the expression of the gene that's missing and you give them time to recover their health, maybe they opt back into assistance in the processing of the visual signal. And if that's correct, we may well hope to see the improvement that was seen in the context of the gene therapy for RPE65, which would be incredible.

Okay, we've got some questions coming through online now. What are your end points for the multi-ascending dose? That's a very good question. And I'll talk generally about the approach to the endpoints at this point has been to cover the field. The first thing that we've got to do is make sure we've got all of the relevant endpoints to the disease process so that we don't miss the efficacy signal. And then what we've been doing is working with clinicians and experts from around the world who are particularly interested in RP11. And we are looking at -- and we're actually the beneficiaries of a group in Norway out of the University of Oslo, who've done some lovely work on a natural history study in RP11 patients already.

And so what we're working with those guys on is looking at which are the endpoints in their natural history study have we seen progression of the decline in the patient's visual function? To give us an early clue in the Phase I/II trial of the end points that we need to be paying particular attention to as well as the patient stratification, which are the patients that are progressing most rapidly on the loss of the visual field curve? So the distinction -- the potential distinction between treated and untreated is the greatest.

And what we're seeing there is perimetry is the key endpoint at this point. That's the insight that we're getting right now. We are looking across a range of other endpoints, including the visual navigation course that was used in the registry -- support of the registration of the existing gene therapy for retinitis pigmentosa, as well as a range of other visual field assessments, including things like the ERG, the electroretinogram or the retina's response to a visual impulse looking at the retina using a bunch of tools that are capable of being put on the front of the eye and seeing any anatomical changes, differences in the thickness of different retinal layers. We are looking at those as well, as well as a standard battery of tests that are related to visual acuity, how well can the patients see. And as you guys are probably familiar having done an assessment on Snellen's chart or reading the letters, the visual acuity is not likely to be particularly helpful for PYC because central vision is preserved. So that's an endpoint of less relevance.

The other dimension that is increasingly getting recognized and where we're a beneficiary of the work that's been done by others, patient-reported outcomes. So questionnaire that the patient fills in reporting on whether or not they are in their functional activities of day-to-day life, noticing an improvement in their vision. So that's a high-level overview, and thanks for the clarification. That's on the efficacy side of things.

Can we please clarify the timing of the commencement of the Part I and Part II trials? So the usual [indiscernible] so pending acceptance by the U.S. regulator of the IND that's been submitted, we'll be looking to start the clinical trial in Q2. That's part one. And then the timing of the transition from Part 1 to Part 2 is informed by the efficiency of our progression through the patients in the single-ascending dose study. So if we can get through, identify the patients and treat the patients, the 3 in each group in the single-ascending dose study, we only need to finish the dose escalation and then wait 24 weeks before we'd be converting to a part 2 for the multiple dose study.

The real advantage that we've got here is that we've got patients who are already enrolled in the natural history study who we can convert across to the interventional study if we want to, to ensure that the enrollment of the patients in the interventional study is efficient. So we should have control of that. High-level top-down answer. The safety study is this year, we're moving to the multi-dose study next year.

I've got them, up here. Yes. So I've got the best case when -- with this drug reach market. And then could the Phase I, II, Part 1 and Part 2 overlap at all? So it's interesting, we'll answer the second one first, not the Part 1 and the Part 2. No, you need to establish the maximum tolerated dose before you move to the multidose study. But the Part 2 and the pivotal could overlap. Yes, there's the potential for that to happen. And so that then informs the complexity, Robert, that means we can't answer your question entirely at the minute because the design of the pivotal, and when we initiate the pivotal and whether it's overlapped with the Part 2 will be dependent upon what we see in the early phases of the valuation.

But what we can say is that the FDA requires one 24-month study on safety and one 12-month study from an efficacy standpoint in order to support the registration of the drug. So it gives you a sense of the critical path time line. Most important is for people to understand that it's -- it's not so much the timing of the entry of market. It's the timing of the establishment of the efficacy signal that is likely to be driving the valuation of the company. Okay, so we dealt with those lines. We've had a good go at RP11.

ADOA is a very, very exciting program, and there's lots happening right now in this program as we move to confirm the final candidates that we will then be sending off to the drug manufacturer to make in very high purity for us to enter those toxicology studies that we need to be into in the second part of this year in order to be prepared for the IND that comes next year.

There is -- firstly, before we get to the quote on the page here, we remember we continue to invest in our platform technology. and we are live at the minute in a study that is evaluating a second-generation delivery technology. The early indications from the small animal, from the mice, is that we have a delivery technology that is much more potent than the delivery technology used in RP11.

This will be confirmed very soon in the context of an eye that anatomically is closer to a human's, a rabbit. If we see a much more potent delivery profile in the target cellular layer, that is going to be a very, very important piece of information because remember, the 2 questions that you are most interested in, can I deliver enough drug inside the target cell of interest? Can I modulate the gene that is causing the disease once I'm inside that cell to rescue the disease process?

So that's going on the delivery platform side. On the assessment of the drug itself, we're getting into the patient-derived models. So we're now looking at what's going on in control of gene expression in the target cell, that is piping this disease process in cells that have been generated from patients with this disease.

And you just see a lovely quote here. Again, remember, when I say the goalpost in the industry are shifting, everyone wants to shift risk left in the curve. And one of the ways -- one of the revolutionary ways in which this has been done most recently is through the creation of organ in a dish models, the ability to build a human eye outside of a human. It's a pretty radical concept, but it gives you the precise genetic background against which you want to test the efficacy of your drug. These results are coming in Q2 for the ADOA program, and they will be used for the selection of the final candidate there.

That gives you a lot of insight, lots and lots of insight in terms of the prospectivity of that candidate success in clinical development. Remember, this is a bigger patient population than RP11, roughly twice the size.

And the third program, this is a hot field at the minute. As we mentioned before, journal articles calling for potential disease-modifying drugs in the context of these neurodevelopmental disorders, and calling out SHANK3 or Phelan-McDermid syndrome specifically as one where the patient population is really going to benefit from a disease modifying therapy. What we are doing here -- and this is one for the more advanced understanders of the PYC story. We're using a naked antisense oligo, with a different chemistry to that which we're using in the earlier 2 programs.

And you might ask, hang on a minute, why are we doing that? If we know that the problem with the RNA therapies is that they don't get what into the target cell well enough, why would we make the retrograde step of moving back to a naked antisense oligonucleotide? The reason for it is, there is a very clear clinical and commercial validated pathway for a naked RNA therapy for the treatment of a disease of neurons, specifically. And there's a beautiful set of data that's come into the public domain from other companies that have been active in the space in different diseases, linking the bio-distribution or the profile of where your drug goes when you administer it in a rat to a nonhuman primate. So that means you can actually get very good insights on whether your drug can reach the target cell in a human from a rat model, which is quite incredible.

So what we're going to do is we're going to use the rat model to go head-to-head with what the fields are doing with a naked RNA therapy, which we own through the composition of Matter Patent that we find, head-to-head with our facilitated delivery technology, the PPMO. We've got a choice between the 2 different technologies, one that's already validated and one that we think is better, but is yet to be fully validated and we will leverage into the studies that have been done linking the rats to the nonhuman primates to show the outperformance of our technology in that context.

It is quite possible in doing that if we see what we hope to see, which is a much greater bio-distribution of our PPMO as compared to the naked oligo to the neurons that we will establish a new delivery paradigm for RNA therapies in the CNS in the process. And that would be quite powerful for us.

The difference there and the reason that we haven't jumped straight into it from the eye to the CNS, remember the eye is a very small organ. And the proximity of the tip of the needle when you're administering the drug to the target cells is very, very close in the order of a centimeter. This is not the case in the central nervous system. The drug is administered to the base of the spine. It has the traffic through the cerebrospinal fluid, all the way up the spine inside the skull and then distribute within the brain. It's a more complex route of administration and target tissue that we're dealing with. Hence, the desire to stick with the proven and only knock it off once we've got definitive evidence that we are better than that technology. So very exciting in Phelan-McDermid as well.

We've also started the early work on the Wave 2 candidates, hitting the indications that we're going after to support the medium-term aspiration of the company. Very good that we have the aspiration to put 3 candidates into clinical development in the next 24 months, what comes next. Given the strength of the macro trend towards this field, given that we have 7,000 monogenic diseases, 95% of which have no treatment options available today, we are scaling up in a big way.

And so look also for additional population of the pipeline with the candidates that are coming down the pike in the longer term. The reason that we're doing that, the reason we are scaling our technology so quickly is because of the differentiation on the delivery technology, coupled with the standardization in the chemistry of the RNA therapy itself. And what that enables you to do, once you've set those 2 things, you can really move quickly really, really fast.

So we are leveraging now the synergies that we've captured through the comprehensive nonclinical evaluation of the RP11 candidate into other programs. And we're going to use that to drive very fast in the scalability of our technology because whilst the industry is on assets and our platforms now, they'll be coming back for platforms at a time when things are getting better. The cost of capital is cheaper, the sentiment is higher. What we want to have at that point in time is not just a pipeline of a lot of assets that are attractive for the reasons they are right now, but also have demonstrated as much as we can, the applicability of our platform technology to target tissues, target indications that go beyond the eye.

Those rat studies in Phelan-McDermid are also being conducted now, and we are expecting the results of those to start coming out in Q2 as well. So hopefully, I've given you some sense of the scale of the work that is occurring within PYC today. I hope you also have got some sense there is real palpable excitement right now. If you think about what are the actual implications, what's the so what of everything that we've spoken about. Well, we are a company that sits in an industry that is going headlong towards RNA therapies. And we are playing in a space where we've got not only the highest probability of success by modality in the facilitated delivery of an RNA tech, but also the highest probability of success by indication, genetic validation of the targets that we're going after.

We're doing that with a rapid front end, an 18-month time line from the nomination of a target to submission of an IND. At a time when we are simultaneously generating human safety and efficacy data, the currency of the industry right now in our more advanced candidates in the context of a faster path to market, a captive patient population sitting at the back end of it and very high drug pricing. It is a really, really good time to be an RNA therapeutics company, particularly one with a facilitated delivery technology as well. There is going to be an enormous amount of patient impact that comes from these technologies over the coming 10 and 20 years. Very, very significant returns are going to be made within that window.

The space is right. The question for the investors is, can I pick the right players within the industry? And there is a lot to say for PYC's approach and where we sit right now. Hopefully, we've been able to give you some sense of what that looks like. It's going to be a very, very exciting time in the immediate future before the end of this fiscal year and the first half for PYC shareholders. So hold on to your hats, I'm sure it will be a white knuckle ride. It has been so far, it will continue to be so, but a very, very exciting time for investors and one that I hope is going to be very rewarding.

All right. We'll open up the floor again. We might take, I think we've got an additional 1 online. Could we describe the development of the lab and staff over the last few years to achieve all of this? How many are there, et cetera?

I think this is a really good question. And firstly, people are an asset in that context. We haven't spoken about it now. It's not yet ready for prime time, but there's a bunch of other stuff going on in the background that is driven by extraordinary scientists from within the team having learned a lot in that time frame and having a captive pool of these patient-derived models already up and running. So we can evaluate changes in different applications of RNA technologies and make sure that we are moving with the space in that context as well.

That's driven by our people. our people in the discovery team in Perth, we have 60 staff here in the discovery operations, and were complemented by another 4 in San Francisco who focus more on the development side of things as well. One of the key things that we're missing in the Australian ecosystem is the industry experience of knowing what the minimum viable product is. There's 100 beautiful things that we could do in evaluating these drugs in the nonclinical setting, what are the 10 that we really need to do that give you the 80-20 answer that enable us to move quickly, and that industry knowledge has been brought on through the introduction of those key staff in San Francisco.

And we are really working as one team. We're integrated now in moving these assets quickly. So I'm very pleased with the evolution of the industry -- the evolution of the company within the context of a hyperdynamic and moving industry. We've got to keep doing that. There is a lot going on. You all have seen what's happening in artificial intelligence, analytics, RNA technologies. We've got to evolve -- continue to evolve the structure of our discovery and development operations to make sure that we are keeping up with what's happening in the field. So it's not just about the assets, it's about how we're evolving the company for what's going to come next as well, I think, relating to the question earlier around competitive threats.

Okay. Any other questions from in the room. Please feel free if you've got any online to send them through. Anything from anyone else? No takers? We'll give you a couple of minutes online just to see whether or not there's anything else that wants to be asked. Sorry, we do have one that I skipped over. What will be the visual requirements for the patients in the Phase I?

So this question relates to the points that I was talking about earlier. In terms of the visual requirements, we don't have any specific criteria for the patients from an eligibility perspective. What I think we are more interested in is whether or not we can stratify patients by the stage of their progression within RP to ensure that they are going to give us an opportunity to look beyond the primary objective of the study, which is safety tolerability, to glean some insight on what is happening from an efficacy perspective.

So we are going to be looking for and trying to generate some early readouts in relation to the efficacy side of things. And for that, as I mentioned previously, we need patients who are progressing on the different endpoints that we're using in the clinical trial at a rate that is going to enable us to see a deflection in the context of treatment within the time frame that we've got in the clinical trial. This is the flip side of it being a slowly progressive disease. It takes a while to see the delta. So there's always 2 sides of the coin. The benefit, if we get through, we capture all the patients. The downside, it could take a little bit longer in order to see a significant enough difference between treated and untreated in order to know that the drug is working. So there are none from a requirements perspective, it's much more about the thinking that we do in terms of selection of the patients through that stratification process that I've spoken about.

Some more coming through. Are we able to talk to the company that has raised $1 billion? I'm not entirely sure which company you're referring to, they're the $1 billion, that was $0.25 billion raised by the delivery technology company overnight, Peter. This is standard fare for the U.S. This is happening daily. So we're not restrained in terms of who we talk to, but we're not looking for an enhanced delivery technology right now.

We're very, very happy with the results that we've seen to date. And I think we're very keenly anticipating the results of those rabbit studies that I mentioned are being conducted in the platform context to have a look at how far can we improve our own delivery technology. I guess the question would be more, do they want to talk to us, given that they're a delivery technology and non-RNA drug design entity, whether or not we could partner from that perspective. Really, what we do there is we take BD as a whole. We try and communicate very clearly what we do, and we share that with people who have an about interest in the areas of overlap common interest. And that's what we -- what we look to do from a business development perspective. But we've got discussions ongoing at all stages of the chain in that regard, and we'll continue to do so.

Question coming through, are we concerned that more rapidly progressing patients could also be more difficult to treat? Yes, that's a very good question. And so firstly, it's the reason that we went with RP, not most of the phenotype. So we had to look at clinicians. And for those who've been committed, rested on shareholders to PYC for a few years, remember, going back to the strategy considerations around why we steered clear of the Leber congenital amaurosis and the concerns that we had with the CEP290 programs that were going on in that regard. We talk to the clinicians these patients have not many [indiscernible] at the time they're born, and they fall off a cliff in terms of the loss of those [indiscernible] receptors.

So yes, we definitely are concerned by that. We've mainly addressed it in the context of the strategy level by picking an indication where you tend not to see patients who are progressing rapidly. And so what you see in the natural history studies that have been done, it's [Josephine Printer Hulton's] group at the University of Oslo, some very elegant work, is that the maximum rate of progression in RP11 is a loss of around 8% of visual function a year. And there aren't many, if any, I don't think I've seen any outliers who are progressing at a significantly increased rate as compared to that.

And you see preservation of the visual function almost uniformly in the patients through to the later decades in life, fourth decade onwards. So yes, we would be worried about it if it was a feature of RP. But we are not because of the slowly progressive nature of it and what's been observed in the natural history studies to date.

Last chance. Maybe whilst we're waiting and giving people a final opportunity. So there were 3 things that we wanted to do to enable you to ask questions and to become a bit more engaged in what's going on within the organization. Hopefully, we'll fulfill that one.

Secondly, to share the enthusiasm and the excitement, sometimes I feel a bit like a used car salesman getting too excited about what's going on in the company and being evangelistic for what's happening. But we don't want to go overboard. It's a pretty tense time. It's a hyperdynamic industry. There's lots going on. We've got to respond to it all, but I think we are in a very, very strong position now. Hopefully, the organization can really attack the upside of that, especially if we have to be supported by a rising tide from a macro sentiment perspective, that would be lovely.

But the one thing that I did want to do today, in addition to enforcing the messaging and encouraging you've gone read those resources in relation to the power of genetic validation. It really is the central premise to the PYC investment proposition is to give you a sense of what's going on outside of the RP11 program. There is a lot happening, and it's coming to fruition in the very near term.

So stick with us. I think we're going to give you a lot of insight into exactly where we're at on the programs 2 and programs 3 as well as the platform itself and the next wave of therapies that are coming. And you should continue to think about those 2 core questions as you look at and evaluate the communications that we're putting out to market. Can we reach the target cell, can we modulate the gene expression profile once we get there? If you can do those 2 things, you really do open up a whole new paradigm in terms of what you can do to rescue a disease process.

Two more snuck in, a new comment on the following. Well, that's a long question. One of the main risks associated with RNA-based monogenic therapies is the potential for off-target effects. RNA molecules can interact with unintended genes, leading to unintended changes in gene expression and potentially harmful side effects. To mitigate this risk, researchers must carefully design and test RNA therapies to ensure they target only the intended gene and do not cause unintended effects.

Looks like we might have a copy and paste from a scientific paper going on here. Another risk is related to the delivery of the RNA molecules into the patient cells. The RNA molecules used in these therapies are often fragile and can be degraded or eliminated by the bodies natural defenses, making it difficult to deliver them to the targeted cells. There's also the possibility of the immune system reacting to the RNA molecules, which can lead to inflammation and potentially harmful immune responses. So yes, and there are answers to each one of those elements that inform the specific selection of what PYC is doing. So this is good, but this -- what looks like a paper is referring to RNA therapies as a whole, which includes messenger RNA therapies, which are much, much longer pieces of RNA than what we're dealing with in the context of antisense oligonucleotide.

So the shorter the sequence that you're using, the lesser the risk of the immunogenic potential. And remember that we also have the ability to evaluate immunogenicity before we get into a human. So we take human, we go to the Red Cross, and we get human mononuclear blood cells, and we look at the immune response, the inflammatory response in relation to the administration of the drug in that context, which gives us a lot of insight into what's going to happen when we get into a human.

Coupled with that is that we look in the most sensitive species, rabbits, from an ocular perspective in our toxicology testing, and we look in the most toxicologically relevant species, nonhuman primates. So we're evaluating in both. And this is something that I think is important actually. The GLP toxicology studies have been conducted at 3 different doses. And the no AL, or the no observable adverse event level, so the dose at which we see nothing bad happening, is the highest dose that was assessed. That's 50 micrograms in a nonhuman primate. If you scale the size of the nonhuman primate eye to a human eye, you're looking at an adjustment factor of between 2 and 2.5, that would suggest the human dosing of between 100 and 150 micrograms is safe. We are not looking to exceed that dose. We want to dose less than 100 micrograms in a human. So we had a very good insight into the likely tolerability profile on the back of those studies.

In terms of the RNA molecules and their degradation, again, that's much more of an issue for the mRNA than it is for the antisense oligonucleotides, particularly those that have been stabilized with the multiline backbone chemistry. They're not subject to degradation. And the reason that we're confident here that we're getting the right outcome is because we also look at target engagement in vivo. So we're actually looking not just at how much of the drug or component parts of the drug are recoverable from the retina of the rabbits and the monkeys, but also looking at whether the RNA therapy has actually got inside the cell and engaged with its target. So that's giving you an indication that it has not degraded on its journey to the target inside the cell.

So yes, we can get over that by looking at the -- what we call the PD readout as well as the PK. So PK tells you how much drug is present in the target tissue or the target cell. PD tells you whether or not that drug is engaging with its target specifically. And to have a look at the unintended off targets of an RNA therapy, remember here, we benefit from the greater length of our oligos than those that are used by the majority of the field. The shorter your sequence, the greater the risk that you've got homology or commonality with another area of the genome.

So the companies that are generating naked antisense oligos are shrinking the number of letters in the sequence down to around 16 or 17. They need to make them small because they're quite toxic when you increase the length of the letters because the backbone chemistry itself is quite topical, negatively charged backbone that we spoke about. PYC's oligos are around 25 letters long. So because we've got the longer sequence, we've got the greatest specificity for our target. There's a higher chance that you get overlap just to the target gene and not to any other genes.

So that's been very helpful in that context for us. We can use computer programs to what we call blast the genome or check whether there are any other regions that are likely to have overlap with the drug that we've designed, and that's part of our drug selection process that we're going through in ADOA right now. So yes, we've got a lot of advantages in the context of overcoming those challenges that you've articulated.

All right. Use GPTChat. Very nice, Neil. That's embracing technology. We firmly advocate for that within the company. Taking on what you just said, what will that dose be sufficient to do what you intend to do? That's a good question, Sean. That's complex as well because the traditional what we call PK/PD relationship of small molecule drugs is distorted in RNA therapies. The best indication of whether the drug is going to be successful for an RNA therapy is the concentration of the drug in the target tissue.

And we are the beneficiaries of a number of companies that have gone before us here. What we see when we evaluate the concentration of PYC's drug, VP-001 in target tissue, is that we are significantly higher than what we see in our peer companies in the RNA therapeutic space. So that is extremely encouraging because you have not yet looked fully at the power of the delivery technology there. You're looking at how much drug is recoverable from within the target tissue. But that could be inside the cell or it could be outside the cell. So we are comparing against naked RNA therapies that should be there in much higher concentrations. And including RNA therapies that have proven effective in the clinic, and we are seeing a higher concentration of the PPMO or PYC's RNA technology. So that is very, very encouraging in relation to answering the imponderable element of your question, which is will that be sufficient to do what we intend.

In particular there, SRP-5051 from Sarepta. The PPMO that is in the Phase III study and has already demonstrated efficacy over and above the naked antisense oligo that is already approved for that indication, is present in muscle at a substantially lower concentration than VP-001 is present in retina. Very, very encouraging.

Remember also in RP11, there are patients who have the mutation but don't have the disease, suggesting a very low disease correction threshold. That combination looks very powerful right now. Okay. I think we got -- thank you, from Sean. Perfect. All right, very good. Thanks very much, everyone, for your engagement. As we said, it's going to be an exciting time going forward, and we look forward to updating you again in person at the Q2 update.