Boundless Bio Inc

NASDAQ:BOLD

Earnings Call Transcript 2018-Q1

[Operator]

Good afternoon, ladies and gentlemen, and welcome to the Audentes Therapeutics’ First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this conference call is being recorded.

I would now like to turn the conference over to Andrew Chang, Director of Investor Relations at Audentes. Please go ahead.

[Andrew Chang, Director of IR]

Thank you, operator, and good afternoon, everyone. Just after market close today, we issued a press release with earnings and operating results for the first quarter 2018. The press release and live webcast access are available on the Investors and Media section of the Audentes Web site at www.audentestx.com.

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

Before we begin with prepared comments from our team, I’d like to remind callers that the information discussed on the call today is covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that the company’s management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company’s business.

These forward-looking statements are qualified in their entirety by the cautionary statements contained in today’s press release and the company’s SEC filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 9, 2018. Audentes undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of today’s call except as required by law.

I would now like to turn the call over to Matt Patterson, Chief Executive Officer. Matt?

[Matt Patterson, President and CEO]

Thanks, Andrew, and good afternoon, everyone. Thanks for joining us today. It’s been a great start to the year for Audentes highlighted in particular by promising data in our X-Linked Myotubular Myopathy or XLMTM program, the dosing of our first patient in our Crigler-Najjar program and the company’s second successful follow-on financing.

On today’s call, we plan to provide an update on each of our pipeline programs. Natalie will cover our lead program AT132 for MTM and also review progress in our Pompe and CPVT programs.

Next, Suyash will walk us through the high-level results from the first patient dosed in our Crigler program which we plan to present Thursday morning at the European Society for Paediatric Gastroenterology, Hepatology and Nutrition or ESPGHAN conference in Geneva. And then Tom will provide an update on our financial results and I’ll close with an overview of the important milestones that we look forward to during the remainder of the year.

And with that, I’ll hand it over to Natalie. Natalie?

[Natalie Holles, President and COO]

Thanks, Matt. Beginning with our XLMTM program, earlier this year we reported positive interim data from the first four patients enrolled in ASPIRO, which included three patients that received AT132 at a dose of 1x1014 vector genomes per kilogram and one delayed treatment control patient.

As we reported in January, the preliminary efficacy results exceeded our expectations and suggested that this dose appeared to have good potential for the future. In order to gather additional data at this dose, we made the decision with our data monitoring committee to expand cohort 1 and enroll three more patients.

This decision has also provided us with the opportunity for longer follow up on the initially treated patients, giving us the benefit of full six months data including muscle biopsies to more completely inform our decision regarding dose escalation.

I’m pleased to share that since our last call, we’ve completed the dosing of these three additional patients and importantly AT132 continues to be well tolerated with no significant treatment-related safety signals to-date in this expansion cohort.

As noted in our press release earlier this afternoon, we are looking forward to providing a full safety and efficacy update on ASPIRO in an oral presentation scheduled for 10.30 AM Central Time on Wednesday, May 16 at the American Society of Gene and Cell Therapy conference being held next week in Chicago.

Specifically, we plan to share up to 24-week data in the first four patients enrolled and up to four-week data from the cohort 1 expansion patients. As a reminder, we will not have muscle biopsy data as part of next week’s ASGCT update but we plan to share this data along with our plans for dose escalation in the third quarter.

Finally, for those of you unable to attend the conference we also plan to share the data via press release and 8-K. As always, I want to thank the XLMTM patient medical communities for their high level of ongoing support for this reporting program.

Now, I’d like to turn to our Pompe program. Last quarter, we announced the results of a comprehensive construct selection study in the Pompe mouse model utilizing a broad battery of biochemical and immunological assays. We selected our clinical candidate AT982 based of its potential to address the recognized limitations of enzyme replacement therapy, the current standard of care in Pompe disease.

AT982 uses its AAV8 vector capsid, which is known to effectively transduce skeletal muscle, the heart and the nervous system and a novel expression cassette which utilizes a desmin promoter to drive gene expression in these same tissues, and incorporates a liver expression enhancer element with the goal of inducing immune tolerance to GAA protein.

We believe that this construct provides a highly differentiated product profile for AT982 and optimizes its potential to deliver long-term and transformative clinical benefit to Pompe patients following a single administration, particularly because it focuses expression of the GAA protein in the tissues most affected in Pompe. As a reminder, we hold exclusive global rights to both AAV8 and AAV9 in Pompe disease.

Based on recent positive discussions with regulatory authorities, we decided to expand our clinical vision to parallel track two separate Phase 1/2 studies for the infantile and late onset Pompe patient populations. To enable this broader vision, we’ve amended our preclinical plans to include a study in non-human primates and plan to initiate this study in the coming weeks. This will allow us to file the IND for both the infantile and late onset Phase 1/2 studies in the fourth quarter of 2018 and to initiate these studies in the first half of next year.

We believe that this novel construct which is optimized to address the known limitations of enzyme replacement therapy coupled with our large-scale manufacturing capability and our planned robust approach to evaluating AT982 in a broad range of Pompe patients in our Phase 1/2 program reinforces our position as the leading company developing a gene therapy treatment for Pompe. And we look forward to providing further updates on our progress throughout the year.

I would now like to turn to our product candidate AT307 for the treatment of CASQ2 form of catecholaminergic polymorphic ventricular tachycardia or CPVT. First, I’m pleased to announce that we received notification from FDA last week that AT307 has been granted Fast Track designation, which is awarded to new drug candidates that show promise in treating a serious life threatening disease and address an important unmet medical need.

In addition, the FDA has completed its initial review of the AT307 IND and provided us with a short list of questions to be addressed prior to the IND becoming active. We do not expect the need to generate any additional data to address these queries and plan to provide our responses in the coming weeks.

Finally, as we’ve mentioned previously, due to the nature of CASQ2-CPVT, we’ve always believed that the disease would be a largely under diagnosed condition and could represent unique patient identification challenges. Late last year, we initiated activities to verify literature estimates of incidence and prevalence and to further characterize the disease burden and unmet medical need for patients living with CPVT.

To-date, we’ve identified fewer patients than expected. These activities are ongoing and ultimately the result of these efforts will inform our plans as they relate to the timing of a potential Phase 1/2 clinical trial. These decisions are particularly important as we consider resource allocation to AT307 in the context of our XLMTM and Crigler-Najjar program, our expanded vision for AT982 to treat Pompe disease and our ongoing evaluation of possible additional pipeline programs that have the potential to address larger market opportunities.

With that overview, I will now turn the call over to Dr. Prasad to walk us through the details of our first interim clinical data for the Crigler-Najjar program. Suyash?

[Suyash Prasad, SVP and CMO]

Thank you, Natalie, and good afternoon, everyone. We continue to be excited about the prospect for Crigler-Najjar Syndrome as another promising target for AAV gene therapy and it is a pleasure to speak with you today and share an overview of the early data from VALENS, the Phase 1/2 clinical study of AT342.

As Matt mentioned earlier, the data of that review will also be presented Thursday morning as part of the poster session, the ESPGHAN scientific conference in Geneva. As a reminder, the VALENS study involves enrolling Crigler-Najjar patients who are on regular daily for their therapy which maintain serum bilirubin below the level of its neurotoxic but still far above normal.

The first 12 weeks of the protocol is focused on collecting safety information on bilirubin levels, whilst maintaining the baseline for this therapy regimen with a plan of weaning from phototherapy will be initiating subjects with a clinically meaningful decrease in bilirubin at week 12. This is defined as a reduction to at least 8 milligrams per deciliter or a greater than 50% decrease from baseline measures.

As you may recall, we previously announced the dosing of the first patient in VALENS in February of this year. This patient is a 12-year-old male who received a dose of 1.5x1012 vector genomes per kilogram. Today, I’m pleased to share the top line 12-week results in this patient. Additional details will be available in the poster presented tomorrow at the ESPGHAN conference.

First and most importantly, we’ve seen an excellent safety profile to-date with no drug-related adverse events and notably no liver transaminase elevations. Started weaning and this patient is underway of progressing well.

From an efficacy perspective, we are pleased to have established initial proof-of-concept evidenced by a rapid and meaningful but temporary decline in total serum bilirubin levels. Specifically, the patient had baseline total bilirubin levels of approximately 11 milligrams per deciliter whilst on daily phototherapy which is well above the normal range of 2 milligrams per deciliter.

Following administration with AT342, we observed a reduction in total bilirubin to approximately 4 milligrams per deciliter by week two with a corresponding observable improvement in jaundice.

After a brief period of stabilization at this level, total bilirubin levels began to gradually increase returning to baseline levels by week 12. This initial outcome is consistent with the results observed in our dose ranging study in the Crigler-Najjar mass model.

In that study, all four doses demonstrated an initial response that reduced total bilirubin levels by about week two. In the two low doses, these levels returned to baseline by about week six while the two higher doses demonstrated durable reduction in bilirubin levels to near undetectable levels that were maintained throughout the duration on the study.

The consistency between the bilirubin curves observed in patient one and the low doses in the mouse study is notable and leads us to believe that dose escalation should translate into durability of effect.

Based on these initial safety and efficacy data, we have consulted with our data monitoring committee and made a decision to dose the next patient with a high dose of 6x1012 vg/per kilo. We’ve amended the protocol to reflect this change and expect to dose this patient in the coming weeks once the requisite IRB reviews of the protocol amendment are complete.

Looking ahead, we’ll plan to provide our next interim data update for the VALENS study in the second half of 2018 in the context of an appropriate scientific conference. We’d also like to recognize the excellent work by our scientific and medical collaborators and our internal team and we are grateful to the Crigler-Najjar patients and families that they’ve been supportive of our efforts to develop AT342.

With that overview, I’ll now turn the call over to Tom to provide an update on our financial results. Tom?

[Tom Soloway, SVP and CFO]

Great, and thanks for the overview, Suyash. We have summarized our first quarter 2018 financial statements in the press release that we made available after the market close today.

We ended the first quarter with $326.1 million in cash, cash equivalents and marketable securities, which includes aggregate net proceeds of approximately $217.2 million for the follow-on offering that we completed in January. These funds are expected to last into the second half of 2020.

Research and development expenses were $19.9 million for the first quarter of 2018, an increase of $5.3 million versus the same period in 2017. The increase in R&D expense was primarily attributable to an increase in development costs related to our AT982 program, increased headcount and related facility costs, increased internal manufacturing costs, and higher stock compensation expense, and is partially offset by a decrease in the estimated fair value of the contingent liability associated with the 2015 acquisition of Cardiogen Sciences which resulted in a $2.3 million reduction in R&D expense during the first quarter of 2018. Research and development expenses included $2.1 million of non-cash stock-based compensation expense.

General and administrative expenses were $6.5 million for the first quarter of 2018, an increase of $2.9 million as compared to the same period in 2017. The increase in general and administrative expenses was primarily attributable to increased headcount and related facility costs, increased professional service fees, higher stock compensation expense and an increase in expense related to public company regulatory compliance initiatives. General and administrative expense includes $1.3 million of non-cash stock-based compensation expense.

Net loss was $25.6 million for the first quarter of 2018 compared to $18.1 million for the same period in 2017. And finally, as of May 7, 2018, we have 36.7 million shares outstanding and 4.9 million outstanding options.

And with that, I’ll turn the call back over to Matt for a few final thoughts.

[Matt Patterson, President and CEO]

Thanks, Tom. Just before opening the call for questions, I’d like to highlight and reemphasize a few of the important upcoming 2018 milestones for Audentes. As mentioned, we’re excited to participate at ASGCT next week and in particular are looking forward to providing a safety and efficacy update for all patients enrolled in ASPIRO, including up to 24-week data in the first four patients enrolled in the study and up to four-week data from the three recently dosed cohort 1 expansion patients.

As Suyash mentioned in our Crigler program, we plan to treat our next VALENS patient at the increased dose of 6x1012 vector genomes per kilo which we expect to occur in the coming weeks. And we plan to provide the next interim data update at our appropriate scientific conference in the second half of the year.

In support of our expanded clinical vision for Pompe disease, we plan to conduct additional non-clinical studies in support of an IND filing in the fourth quarter of 2018 which will enable the initiation of Phase 1/2 clinical studies for both infantile and adult patients in the first half of 2019.

And finally in our CASQ2-CPVT program, we plan to respond to the agency’s questions on our IND, submission in the next few weeks and we will continue with our patient ID activities over the coming months.

With that, I’ll wrap up and tell you that we’re looking forward to all of our upcoming milestones and to sharing these updates with you as our work progresses. That concludes our prepared comments for today’s call. Operator, you may now open the line for questions.

[Operator]

Thank you. [Operator Instructions]. Our first question comes from Ying Huang of Bank of America Merrill Lynch. Your line is now open.

[Aspen Mori, Bank of America Merrill Lynch]

Hi, guys. It’s Aspen on for Ying. Thanks for taking our questions. Maybe just one on Crigler and one quick one on XLMTM. What do you think is driving the transient nature of the response we’re seeing in Crigler? Is this potentially [indiscernible] issue? And then for XLMTM, I think in the first – three patients in the initial cohort we saw the youngest patient had the best response? Are we seeing any sort of trend like that in the expansion as well? Thank you.

[Matt Patterson, President and CEO]

Maybe I’ll answer the ASPIRO question then hand over to Suyash. We’ll provide an update next week at ASGCT about the ages of the new patients enrolled in the study. I think as we said in January, we were really pleased to see promising early efficacy results both in our youngest child at the time patient one, who is nine months at dosing as well as patient two who is four years old at dosing. And of course as a part of our update next week, we’ll share longer-term data for both of those patients. And so hopefully be able to help people continue to understand how to think about results across the age spectrum of these patients. So I guess stay tuned for next week to get more information on the ASPIRO patients. And then for the Crigler question, I’ll hand over to Suyash to take that one.

[Suyash Prasad, SVP and CMO]

Great. Thanks, Matt. Yes, a good question about that Crigler. It’s so difficult to know exactly what’s going on. I’ve been giving this some considerable thought and our leading theory is that we’re at a fairly low dose and so with likely transducing a fairly modest number of cells obviously enough to get a nice drop in bilirubin the first few weeks. But likely as you suggest in your question, there is some immunological consequence occurring, something that’s fairly mild which is causing the transduced hepatocytes to be lost, which is then resulting in the gradual increase of bilirubin back up to baseline levels. I think what’s reassuring is we actually saw this in our MED [ph] study. So you may recall that in the mouse dose finding study, the low and the medium dosages, we saw a drop in bilirubin by day 14 and then a gradual increase again back up to baseline levels. But in the higher doses, it drops down to close to zero, certainly normal levels and that was sustained for a prolonged period. So it seems reassuring, it also seems likely to us that we increase the dose and we’ll hopefully see that increased sustainability of effect.

[Aspen Mori, Bank of America Merrill Lynch]

Okay. Thank you.

[Operator]

Thank you. Our next question comes from Ritu Baral of Cowen. Your line is now open.

[Ritu Baral, Cowen]

Hi, guys. Just to clarify. You mentioned for the XLMTM program your additional expansion patients had very clean safety. Can you just confirm that the original patients also continued to have clean safety, no new safety issues? I’m assuming they were all – at least the original ones all weaned off steroids at this point? And I have a follow up.

[Matt Patterson, President and CEO]

Hi, Ritu. I appreciate the question. I don’t want to preempt next week’s conversation with a full review of safety and efficacy for all the patients. I’d rather defer to that presentation which I think is appropriate, but I can tell you that we’re really pleased with the continued progress of the patients enrolled in that first group in the study and everyone’s continuing per protocol and we’re looking forward to sharing all the updates, both safety and efficacy. But unfortunately we probably need to defer otherwise to respect the presentation for next week.

[Ritu Baral, Cowen]

But per protocol, are they all off steroids at this point?

[Matt Patterson, President and CEO]

Like I said, we’ll give the full update which includes laboratory values, et cetera, for safety and we’ll speak to any existing or non-existing care when it comes to immunosuppressives at the same time.

[Ritu Baral, Cowen]

Okay, fair enough. And then as we look at potential dose escalation, what do you and Suyash need to see whether in the biopsies, whether in functional measures to say, nah, we don’t need to? What does best case scenario look like both on biopsy and functional?

[Matt Patterson, President and CEO]

Yes, I would say we don’t have some sort of quantitative analysis plan that you have to be at this protein expression plus this CHOP INTEND score plus this respiratory function score to decide that the dose should stay where it is or to go up. I think we’re taking kind of an open-minded approach to it, but do feel confident that six months data from that first group of patients and early data from the next three safety and efficacy combined with protein expression out of those biopsies will give us a sense for what’s the right next step. I can tell you that while we started the protocol with 1x, 3x and 5x1014 vector genomes per kilo as our vision for the three dose cohorts, I would say we’re no longer committed to going as high as those numbers and no longer are saying for sure that the next step is 3x1014, for example. We’re instead saying let’s make a data-driven decision about it. And how we see the protein expression levels will be – all the information is key. The protein expression will be particularly interesting. Unfortunately, we won’t have that for next week, as Suyash mentioned, but we’ll have it pretty soon here and in Q3 expect to provide probably in the context of a press release because we don’t have any other logical forums in which to share it, but we obviously want to move forward with enrollment. So we’ll probably share in a press release our data we learned from the biopsies and the decision on dose escalation which will either be stay where we are as we’re really pleased with this dose and everything looks good or go up a dose and at that point we’ll figure out what that higher dose should be.

[Ritu Baral, Cowen]

Great. Thanks for taking the questions.

[Matt Patterson, President and CEO]

Sure.

[Operator]

Thank you. Our next question comes from Chris Raymond of Piper Jaffray. Your line is now open.

[Allison Bratzel, Piper Jaffray]

Hi. This is Ally Bratzel on for Chris Raymond. Thanks for the taking the question. So on Pompe, maybe help us understand the biggest driver behind the program change and just the overall different thinking on the risk reward in the infantile versus later on [ph] populations. And just overall what gives you confidence in being able to enroll two trials in parallel, particularly with other players in this space. And then quickly on VALENS, I think you had previously talked about operational challenges in getting that trial up and running. So I guess just what gives you confidence you’ll get the IRB approvals for upping the dose and enrolling the next patient in a timeline that you outlined? Thanks.

[Matt Patterson, President and CEO]

Sure. So on Pompe, just taking a step back big picture, of course the disease presents across a spectrum of patients, some seeing it in their very early years in the infantile severe form of the disease and others in a more slightly attenuated form that presents more in the “adult form” or adult years. The medical need is high across the entire patient population. It’s particularly high in the severely affected early onset or infantile population. So we’ve always had a passion for number one developing the treatment for all patients with Pompe because it makes perfect sense that this approach could help everyone with Pompe. But we also appreciate that it probably would involve different protocols in those two different patient populations knowing their differences in their clinical presentation. But we’ve always been passionate about trying to get to both as fast as we could and in particular get to the infantile population given the medical need. Early conversations with authorities led us to believe that we were most likely going to start in adults and get some initial data, safety data in particular, and then move on to include infantile patients in our research program which was not a surprise. That was a sort of typical request from the authorities. More recent meetings that we’ve held have given us confidence that that may no longer be as the requirement. It may be in some countries but not all. And we expect therefore we can be more aggressive than maybe the original vision included and in fact advance into the younger patients right away. And so we want to do that. It’s obviously an increase in workload, as you say, and running things in parallel is operationally more challenging but not one that we can’t handle and we’re ramping up the team to accommodate that workload and are looking forward to it. And it gets us to important answers in that program across the patient population in a shorter timeframe which is great. So I think that answered everything on the Pompe question. Turning to VALENS, the reference you made was really sort of an outdated or early challenge we had I think with some of the very initial IRB interactions related to the protocol and some questions around things like the standard of care, using phototherapy, things that were really only relevant in the very early days. There’s no reason that we have to think that there would be delays, in particular given the encouraging proof-of-concept data from the first patient, I think the IRBs will see that and respond to that as encouraging and every reason to help us move forward. So we’re just going through the process. I don’t expect any unique challenges or delays to get to the next patient in VALENS.

[Allison Bratzel, Piper Jaffray]

Great. Thank you.

[Matt Patterson, President and CEO]

Sure.

[Operator]

Thank you. Our next question comes from David Nierengarten of Wedbush Securities. Your line is now open.

[David Nierengarten, Wedbush Securities]

Hi. I just had a quick question on Crigler-Najjar patient. I guess what gives you confidence that it either wasn’t an immune reaction or was it or is it just under dosing – pure under dosing where there is some turnover in the liver and you lost the expression of the gene? Were there any other signs for tests that you did to elucidate the mechanism there for loss of gene expression?

[Suyash Prasad, SVP and CMO]

Sure. As I said – good question. As I said, it’s a little difficult to know exactly what’s going on. We do think of this low dose. There is a modest number of cells being transfused, probably not a huge number, and we don’t think it’s really related to turnover at all. We think it’s more, as I say, some likely immunological consequence that’s attacking the hepatocytes that have been transduced. Having said that, there was no transaminase elevation which actually gives us some encouragement and the fact that the safety profile in this child is so good, it really gives us confidence to go up in dose in conjunction with what we saw in the MED study. So once again I think that going up in dose should solve the issue and believe there will be some immunological consequence attacking these livercytes. But it’s difficult to note for certain.

[David Nierengarten, Wedbush Securities]

Yes, I guess – it just seemed a little inconsistent with the lack of enzyme elevation to have immune response, but maybe it was just a little too small or undetectable. I don’t know, is that possible?

[Matt Patterson, President and CEO]

It’s possible actually. There’s minor fluctuations in the AST and the ALT levels but they’re well within the normal range. So I think it’s absolutely possible that something is happening. Liver is an organ with a lot of regenerative capability and so you can have some consequence which actually doesn’t really affect cells or biomarkers or blood levels particularly much until you actually reach a threshold where you then see the biomarkers being affected. So it’s certainly possible.

[David Nierengarten, Wedbush Securities]

Okay. Thanks.

[Operator]

Thank you. Our next question comes from Joseph Schwartz of Leerink & Partners. Your line is now open.

[Joseph Schwartz, Leerink & Partners]

Great. Thanks very much. So I guess I’ll ask about CASQ2 and you had mentioned that you’ve identified fewer patients than expected to-date and then that will influence the timing of your study start and prioritization. When do you expect to make a decision whether you pursue this further or perhaps swap in a different candidate? Are there other programs which are close to a similar stage of development which you’re contemplating instead and could you perhaps quantify the difference in prevalence that you’re finding in the real world versus what the literature would suggest?

[Matt Patterson, President and CEO]

Thanks, Joe. I think I’d rather not yet get into specific numbers on the patients found. The original literature suggests that there be as many as 4,000 to 6,000 patients globally living with CASQ2-CPVT. But we always appreciated that that would be – that would likely be grossly under diagnosed that we would find fewer patients than that. So the numbers have been as we said lower than we expected. And for us as you suggest and ask, it starts to fit into a bigger vision for the company. One of our priorities for future programs is to go after slightly larger or larger market opportunities still within the rare disease space but of course there are many larger targets and Pompe is a perfect example of that. So we’ve taken the subject seriously and we want to do additional work on it. I would say it could take us over the course of the rest of the year. Certainly, the coming months will be important as we evaluate this further and of course we’d provide yet another update in August. But in the meantime you’re right and we said it in our script and we’ll say it again. We are actively evaluating new opportunities and we prefer going forward to bring forward new opportunities, if possible, from organic research at the company and that scenario of investment for us and frankly we’re encouraged by some of that progress. And I think that could end up playing a role in our decision making around resource allocation and the importance of going forward with CPVT given the patient numbers versus other things we could spend our time and money on. So all that will progress over the coming months. We’ll certainly provide yet another update in the next quarterly call and take it from there.

[Joseph Schwartz, Leerink & Partners]

Okay. Thank you. And then also on CASQ2, what sorts of questions do you need to address for the FDA and what needs to happen before you can start a study if you were going to proceed there? I noticed there was an abstract on different delivery approaches intracoronary [ph] versus peripheral vein. Is that one of the issues or are there other things that need to be worked out?

[Matt Patterson, President and CEO]

No, that’s just a preclinical research study that we did a while ago evaluating different routes of administration which has historically been a question for going after cardiac indications, the results of our work pre-clinically have told us that a simple systemic IV administration should be perfectly adequate to transduce the heart for CPVT or frankly for other cardiac indications as long as we are with the right vector and the right dose. But no, the questions from FDA are quite straightforward. I can tell you that they’re not related to safety concerns. They are simply questions and points of clarification around our proposed clinical study. For example, justification around entry criteria for age of patients or justification for the number of times we want to do an exercise stress test on the treadmill which is one way to see the effect. So simple questions that we feel we can answer in the coming weeks and we’re optimistic that our answers will be satisfactory and that the IND will get cleared and we’ll be in a position to go forward when we’re ready.

[Joseph Schwartz, Leerink & Partners]

Great. Thanks for taking my questions.

[Matt Patterson, President and CEO]

Sure.

[Operator]

Thank you. Our next question comes from Raju Prasad of William Blair. Your line is now open.

[Raju Prasad, William Blair]

Thanks for taking the question. Just a quick clarification on the Crigler-Najjar preclinical model. What dose in the model would kind of correspond with the 6x1012? And if you were to characterize the kind of dose response drug from the preclinical model, is it more of a linear base dose escalation or is it a threshold that you get across where you feel comfortable that [indiscernible]?

[Matt Patterson, President and CEO]

Well, I can start and Suyash you can add to it. As we talked about before, we attempt to start our studies in patients at a dose that we feel likely to be efficacious and that is a model we followed using our – in our Crigler program as well. When you look back at the dose ranging data, you’ll note that of the four doses evaluated, two of them as Suyash said the higher two resulted in a reduction to normal bilirubin levels that was durable throughout the length of the study. And one of those doses, the lower of those two high doses, was 1.5x1012 which is what we started with in our clinical study. So that was a reasonable decision at the time. I can tell you that there are some art to extrapolating from mouse data to humans on these things. And so we always knew there was some risk to that decision but it’s all reasonable all things considered. The 6x1012 I guess you could characterize as sort of in between those two highest doses in the mouse model, so in between the 1.5x1012 and the next highest dose in the mouse which was one log higher, 1.5x1013, so somewhere in between the two. We just felt like that was an appropriate decision on both – being focused on safety of course but also optimism around efficacy. So we’ll do that and we’ll get those data in that next patient and take it from there.

[Suyash Prasad, SVP and CMO]

And to your next question I think is about threshold levels, is that correct? It’s difficult to know but I think with a high dose we’d hope to achieve a threshold level of which point you would see sustainable effects in changing bilirubin level. So [indiscernible] to be seen but I think that’s what the mouse data would suggest and up this dose between the two high doses in the MED study we hope will do that.

[Raju Prasad, William Blair]

Would it be worth it to maybe go higher if you kind of don’t see that durable response?

[Suyash Prasad, SVP and CMO]

Absolutely. We hope that – as Matt suggested, we’re always going with a dose that we think is going to be efficacious. With this initial dose, we demonstrated proof-of-concept. Bilirubin came down beautifully. Unfortunately it tracked back up again. We’d hope with the next high dose 6x1012 would result in more sustained effect. But you’re right. It could be that it also doesn’t and we have to go to the next high dose which we anticipate would be 1.5x1013 dose that we may well need to get to the high also.

[Raju Prasad, William Blair]

Great. And if you don’t mind if I ask one more on I think we’ve previously discussed maybe on that designation for XLMTM and is that something that you would do on functional data or would you wait for biopsy data, just anything on strategy there on getting some [indiscernible] approval guidance?

[Matt Patterson, President and CEO]

Yes, I would say without getting into the strategic detail I suppose I can tell you that we’re eager to pursue those designations at Pharmed in U.S. and PRIME in Europe and have a plan to do that. And we’re hopeful, optimistic I would say based on the latest data that we’ll be able to get those designations this year. And of course once those are in place then we can immediately request meetings with the relevant authorities to talk about next steps for the program, which I would hope might happen by the end of the year, remains to be seen. But that’s our goal. And of course that will all happen in parallel with collecting additional information in the clinical trial which will clearly inform where those meetings might go. So that’s the best I can give you for today. We’ll certainly keep you posted as those designations may be achieved.

[Raju Prasad, William Blair]

Okay. Thanks for all the questions.

[Operator]

Thank you. Our next question comes from Matthew Luchini of BMO. Your line is now open.

[Matthew Luchini, BMO Capital Markets]

Hi. Great. Thanks for taking the question. So on MTM, I appreciate that the dose escalation question is going to be based on I guess sort of the totality of a number of different factors. But I’m just wondering if you could provide a little bit of color on how you’re maybe ranking those different factors, what level of importance you’re thinking about CHOP INTEND say versus biopsy? And then relatedly, how do we think about sort of the longer-term follow up especially in terms of CHOP INTEND scores at six months? I think we’ve talked a little bit about expectations for continuing improvement but I’d love to get your latest thinking on that as well. Thanks.

[Matt Patterson, President and CEO]

I’d love to get you more on the dose decision, dose escalation decision but I just don’t know that I can. It is going to be this combination of each of those factors; efficacy measures, you mentioned CHOP INTEND, you mentioned – the respiratory function, safety of course, any trends of importance and protein expression. We have always been [indiscernible] that in MTM we’re working with an enzyme that we feel you don’t need at very high levels to have a therapeutic impact. But we also demonstrate in our preclinical studies that we could dose at a level that got you all the way to your normal levels. So obviously we’d love to get to a place over the course of this program where we can get as close to normal levels of protein expression possible with an excellent safety profile and presumably of course good efficacy profile. So I wish I could give you more there but I think that’s all I can say for today. Certainly, we’ll try to share all that full perspective when we have the information, then we’ll share an update in Q3. And the other question – darn it, I’m blanking. Matthew, can you help me with the second question?

[Matthew Luchini, BMO Capital Markets]

It was just how to think about longer term outcomes of CHOP INTEND towards six months?

[Matt Patterson, President and CEO]

Sure. Well, CHOP INTEND is a scoring system intended for children up to six months of age. Of course, all our kids score very low below that, even the child whose four years of age, patient two. But we saw those important improvements early on. We’re looking forward to sharing additional information there. As patients get closer and closer to that max of that score, we do think it will get harder to see any improvement of course. But that’s part of why we built in other tools to evaluate neuromuscular function. For example, as patients get above 45 on the CHOP INTEND over time, we will begin also assessing and using the Bayley scoring system which is a tool for evaluating progress in older children. So we’ll try to layer on additional tests to make sure we’re still getting sensitive measures of efficacy and improvement over time, while still measuring CHOP INTEND to make sure of course nothing changes. So yes, as those patients get close to the top up to into mid-50s to low-60s, we wouldn’t expect you’d see much change. But we’ll start to see over time additional data from other measures and hopefully that will be informative.

[Matthew Luchini, BMO Capital Markets]

Great. Thank you.

[Matt Patterson, President and CEO]

Sure.

[Operator]

Thank you. Our next question comes from Ren Benjamin of Raymond James. Your line is now open.

[Ren Benjamin, Raymond James]

Hi. Good afternoon, guys. Thanks for taking the questions. And congrats on the execution of all these studies. Matt, if we can talk maybe a little bit about this gradual increase in bilirubin. Does it by chance kind of correspond with the decrease in steroid use? And if it does, are there other options besides dozing that could be explored including like intermittent steroid use of raising the dose of steroids? Have you evaluated any of those options?

[Matt Patterson, President and CEO]

Suyash, maybe you want to take that. I would say we starting seeing that effect while the child patient was still on the base steroid regimen.

[Suyash Prasad, SVP and CMO]

Absolutely. The child is on eight weeks of 1 milligram per kilogram per day or oral prednisolone. So we actually saw the drop at day 14, a little bit of stabilization for a couple of weeks, then the gradual increase from about week five. So while the patient was still on the full dose of steroids. We have started weaning and there’s been no elevation of AST or ALT. So I think really the steroids were there to prevent any kind of a T-cell mediated response which we’ve not seen whatsoever. So we feel pretty comfortable reducing the oral prednisolone and we’re part way through the tapering and the child is tolerating that nicely. But it doesn’t seem to be related to the bilirubin levels.

[Ren Benjamin, Raymond James]

Got it, okay. And then just confirm for me. This patient came from the LUSTRO study and can you talk a little bit about – because I thought in prior data presentations that we see quite a decent bit of variability in exposure to phototherapy. Can you talk a little bit about what the baseline for variability was or with this patient what that could have been?

[Suyash Prasad, SVP and CMO]

Sure. This patient was on the LUSTRO study for a period of about six to nine months, so we have a lot of nice data on him. I actually don’t have the graph in front of me, but from recollection the lowest his bilirubin level ever got was about 10 milligrams per deciliter and it seemed to bounce between 10 and 13 milligrams per deciliter in the LUSTRO study. And then actually his data specifically in LUSTRO is in the poster. You will see a nice graph of that bouncing up and down to that 10 and 13 before being dosed and seeing a nice dropdown to 4 before a gradual rate increase.

[Ren Benjamin, Raymond James]

Okay, his phototherapy regimen --

[Matt Patterson, President and CEO]

It was in early days of this study. So to ensure that’s not a factor, we don’t change that between day 1 and day 12 – sorry week 1 and week 12.

[Suyash Prasad, SVP and CMO]

Yes, the phototherapy is very consistent, it’s very constant and it’s documented daily.

[Ren Benjamin, Raymond James]

Yes. And that was my final question as to how closely you follow the phototherapy after treatment and whether any sort of other changes, maybe not even having to do with phototherapy but just activity, anything else that could affect bilirubin levels? Are you aware of anything else that might cause that severe drop?

[Suyash Prasad, SVP and CMO]

There were a number of factors that caused subtle variations but nothing that causes that degree of drop. For example, bright sunlight can cause maybe a drop of 0.5 milligram, maybe 1 milligram per deciliter but wouldn’t cause the profound drop we saw after dosing of this one patient. So we do keep an eye and we do document in patient diaries any of these variables that might have some subtle bilirubin levels. But in general, because we have the longitudinal data in LUSTRO, we see the up and down variability over a long period of time before dosing. That variable is really going to be – make a difference whatsoever.

[Ren Benjamin, Raymond James]

Perfect. Thanks for taking the questions and good luck.

[Matt Patterson, President and CEO]

Thanks, Ren.

[Operator]

Thank you. Our next question comes from Difei Yang of Mizuho. Your line is now open.

[Difei Yang, Mizuho]

Hi. Thanks. Good afternoon. Thanks for taking my question. So on Crigler-Najjar program, is the relationship between time on phototherapy versus bilirubin level a linear relationship?

[Suyash Prasad, SVP and CMO]

I think – I’d like to be able to say yes it is, but I don’t think it’s fully know. And no, it’s not really a linear relationship. There’s a whole host of factors often patient specific. So it depends a little bit on your genotype as well and how severely affected you are. What we do now is that the more phototherapy you have, the more that brings the bilirubin levels down to a certain point. And once again it works to a degree but not really anywhere close to bringing the bilirubin levels down to normal. It brings down the danger range which is 20 milligrams per deciliter but still often it’s pretty close to danger range. And a child who’s a bit dehydrated, who has a viral infection that can slip back up into the danger ranges again. As the child ages as well, there’s a difference, because the older you get the bigger you become and the bigger you are, the lower surface area to volume ratio you have. So actually phototherapy becomes a little less effective as you get older. Also your skin thickens. So as these kids get older, the phototherapy becomes less effective. So there’s a whole host of factors. But to specifically answer your question, I don’t think the relationship between bilirubin and phototherapy is directly linear, no.

[Difei Yang, Mizuho]

Okay. Thank you. Then you talked about in the mouse model there is two high doses, two low doses. What’s the rough ratio between the high dose versus low dose? So I guess I’m trying to see if it’s above four or below four?

[Matt Patterson, President and CEO]

The doses in the mouse study went from – it was at the four log range. So lowest dose being 1.5x1010, the next dose being 1.5x1011, the third dose 1.5x1012 and the highest dose 1.5x1013. So the four doses in that study covered a four log range, as we mentioned earlier. Our decision to increase our dose really puts our next dose between the two highest doses evaluated in the mouse study and we look forward to getting results of that dose. And depending on how that goes, we may find ourselves wanting to escalate that again which of course as a reminder for everyone was always a part of the vision and the expectation for the study. So none of this is assuming a surprise for us and we’re encouraged by the results today.

[Difei Yang, Mizuho]

Okay. Thanks.

[Matt Patterson, President and CEO]

Sure.

[Operator]

Thank you. Ladies and gentlemen, this does conclude our question-and-answer session. I would now like to turn the call back over to Matt Patterson for any further remarks.

[Matt Patterson, President and CEO]

Great. Thank you again everyone for your participation this afternoon. I appreciated the chance to share updates with you and look forward to providing further information and speaking again as the year progresses. So, operator, that concludes our call for today. Thank you.

[Operator]

Ladies and gentlemen, this does conclude today’s program. You may all disconnect. Everyone, have a great day.