Boundless Bio Inc

NASDAQ:BOLD

Earnings Call Transcript 2019-Q3

[Operator]

Good afternoon ladies and gentlemen and welcome to the Audentes Therapeutics Third Quarter 2019 Earnings Conference Call. [Operator Instructions]

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

[Andrew Chang, Head, 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 third quarter 2019. The press release and live webcast access are available on the Investors and Media section of the Audentes website at www.audentestx.com. The webcast link will be available for approximately 30 days.

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

Before we begin with prepared comments I'd like to remind callers that the information discussed on the call today is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. I caution listeners that the company's management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and the company's SEC filings. The content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast November 7, 2019. Audentes undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of today's call except as required by law.

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

[Matt Patterson, Chairman & CEO]

Thank you, Andrew and good afternoon. Thanks for joining us today. We are pleased to share with you the recent progress we've made across our product portfolio as well as several important key milestones we're looking forward to as we close the year. Beginning with our lead program AT132 for X-linked myotubular myopathy or XLMTM we were pleased to present updated positive data from ASPIRO at the recent World Muscle Society Meeting in early October. We were particularly excited to report that the first seven treated patients all six treated patients in cohort one and the first patient treated in cohort two are now ventilator independent and four patients are now walking independently or with support. These outcomes stand in stark contrast to the natural disease course of XLMTM. Feedback from our treating physicians and KOLs continues to characterize these clinical benefits as unprecedented in the field of neuromuscular disease. And importantly AT132 continues to be generally well tolerated with a manageable safety profile across both dose cohorts.

Turning to the pivotal expansion cohort for ASPIRO I'm pleased to share that as part of our patient identification efforts we were able to identify two additional patients who met the study criteria bringing the total planned enrollment to 10 patients or 5 age-matched treatment and delayed-treatment control pairs. We expect to imminently complete enrollment of the final patient and as a result remain on track to submit a BLA in the United States in mid-2020 and a MAA in Europe in the second half of 2020.

And with that I'll turn the call over to Natalie to walk through our recent progress on the rest of the pipeline. Natalie?

[Natalie Holles, President & COO]

Thanks, Matt and hello everyone. I'll start with un update on our Pompe program and an overview of our differentiated approach to AAV-based gene therapy for this disease. As a reminder we believe that AT845 is the only gene therapy in development today which is delivering and expressing GAA directly in the primary tissues affected by the disease. Both enzyme replacement therapies and liver-directed gene therapy candidates rely on an inherently inefficient multi-step cross-correction mechanism to achieve the intended biologic effect.

First, GAA must be delivered into the bloodstream either via exogenous infusion or an internal liver-based pump. Then circulating GAA needs to be taken up from the plasma into the myocytes and then properly trafficked to the lysosome its native site of intercellular action. From a competitive perspective the liver-directed gene therapy approaches must engineer the GAA transgene to attempt to improve the efficiency of this cross-correction but this also creates the potential for neoantigen-induced immune responses to this nonnative version of GAA. In contrast our approach delivers and expresses wild-type GAA directly where it's naturally active which we believe will result in higher levels of GAA expression and activity in the key muscles that drive Pompe disease pathology and an overall superior therapeutic profile.

With respect to our Pompe development candidate AT845 we recently achieved our stated goal of submitting the IND at the end of the third quarter. The FDA's review of our submission is ongoing and in parallel we are progressing our clinical trial site startup activities in anticipation of starting our Phase I/II clinical study in the first quarter of next year. To that end we are initiating a screening study with our U.S. trial sites to accelerate patient identification for enrollment into the Phase I/II study. It's also important to note that we have already completed GMP manufacturing to supply the entire Phase I/II study the design of which we expect to share in the next quarter ahead of the study's start. We also plan to share our nonclinical data on AT856 at the World Symposium next February and look forward to keeping you apprised of our progress with this important program in the coming months.

Turning now to our Duchenne Muscular Dystrophy or DMD programs; we're excited about the significant progress we have made with these programs as well during the quarter. As a reminder in DMD we are advancing a platform approached to vectorized exon skipping in which we are utilizing a single U7 snRNA backbone construct combined with unique dystrophin exon targeting oligonucleotide sequences to efficiently advance development candidates for multiple DMD genotypes in parallel. To that end during the quarter we held a productive face-to-face meeting with the FDA to discuss our proposed approach to streamlining the nonclinical CMC and clinical elements of the overall development plan. We were very pleased with the agency's level of engagement and the overall tenor of this initial discussion. And importantly we gained general alignment on our proposed next steps for the program.

For AT702 our first product candidate utilizing the platform backbone dose ranging and toxicology studies are progressing well. We remain on track for an IND filing in the first quarter of next year and plan to initiate a clinical study in the second quarter. With the second candidate AT753 we've selected our exon targeting oligo sequence and manufacturing is underway to support IND-enabling studies to be initiated this quarter and AT751 is following closely behind with oligo sequence screening underway and IND-enabling studies expected to begin next quarter. As a reminder we believe that together these first three vectorized exon-skipping product candidates have the potential to address more than 25% of the Duchenne population. And also importantly as with both XLMTM and Pompe we expect to initiate our clinical program utilizing our commercial manufacturing process which we believe will provide a meaningful competitive advantage in terms of the speed with which we can advance through clinical development in DMD.

In our myotonic dystrophy program we continue to make progress with our construct screening studies for AT466 utilizing both vectorized RNA knockdown and vectorized exon skipping approaches. We look forward to sharing data from this program next year and remain on track to submit an IND in 2020. We're excited by the potential of this program given the sizeable patient population high degree of unmet need and the uniqueness of our approach which leverages our AAV manufacturing and neuromuscular expertise to provide a potentially transformative benefit for this devastating disease.

Turning to manufacturing; we were pleased to report that our process performance qualification or PPQ campaign is well underway and our facility's preapproval inspection activities -- readiness activities are on track to support the AT132 BLA filing mid next year. In our plasmid facility we completed all of our GMP readiness activities last month and expect the AT702 clinical campaign to be the first to utilize GMP plasmid manufactured in house. We continue to view our investment in end-to-end internal manufacturing as the cornerstone of our strategy for delivering our important therapies to patients and creating long-term value for our shareholders. Finally, we continue to maintain a strong balance sheet with $351.5 million of cash equivalents and marketable securities as of September 30 2019. Our balance sheet's strength positions us to continue to make meaningful progress across our pipeline. We are excited by our multiple upcoming milestones and look forward to keeping you apprised of our work over the coming months.

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

[Operator]

[Operator Instructions] Our first question comes from the line of Debjit Chattopadhyay from H.C. Wainwright. Once again, our first question comes from Debjit Chattopadhyay from H.C. Wainwright. Your line is now open.

[Unidentified Analyst]

Sorry, I was on mute. So my question is on the population that would be amenable to treatment for the Pompe -- I'm sorry for your XLMTM program. So do you think -- are you thinking that there would be an upper limit to the age of which you would expect to see a clinical benefit perhaps due to excessive muscle fibrosis?

[Matt Patterson, Chairman & CEO]

Hi Debjit, this is Matt.

[Unidentified Analyst]

I'm sorry, this is Aaron [ph] on for Debjit. I forgot to mention that.

[Matt Patterson, Chairman & CEO]

I apologize; I didn't hear that. You know MTM we've talked about a few times over time. MTM is a really unique muscle disease. It does not suffer the same degree of inflammation scarring and progressive damage that one sees in other neuromuscular diseases like Duchenne, and so we've always had optimism based on our preclinical work that we'd be able to treat patients across the age spectrum and show a benefit. And sure enough you see that represented in our study where we've shown dramatic improvements in kids ranging in age from nine months to six years. And so we continue to have great confidence that even in children who've been living with the disease for a number of years that we can produce benefit with this approach.

And that being said, that's something that we will continue to explore and are considering investing very soon in that additional clinical study that we'll explore safety and efficacy in slightly older patients. And so that's something that's top of mind for us and of course we think of that in terms of commercial as well and ensuring we have the strongest story possible to achieve reimbursement across all patients with MTM. So more to come on that but in general biologically in particular we're confident that all MTM patients can benefit from this treatment.

[Unidentified Analyst]

And on your plans for DMD and Pompe so the plan is ultimately to use the same AAV8 vector. I know you guys had mentioned before you were going to initially use the MCH AAV9 and then transition to AAV8. So based on the high amount of vector genomes per nucleus that you saw at the 1x10

[Matt Patterson, Chairman & CEO]

Well, we're certainly continuing to be committed to AAV8. We think it's a serotype that has shown tremendous potential in the MTM program of course. And so in both programs Pompe and Duchenne we'll be using AAV8 again. As far as specific doses and promoters and such there's definitely differences program to program and we look forward to sharing more info on that when we have the Pompe clinical discussion after getting FDA's review of the IND and similarly on Duchenne. But I would just say that in our experience and this is one of the lessons learned over the years in multiple indications is that each of these diseases is different in its own ways. The protein you replace in each case is different in its own ways and you really have to work to figure out how best to apply this science. And so we've learned a tremendous amount and feel extremely positive about where we are with Pompe and our next steps in that program and similarly with Duchenne. Although of course with Duchenne as you know it's a different scientific approach vectorized exon skipping. But nonetheless we apply a lot of good lessons learned in our preclinical work to set ourselves up for success in both cases.

[Unidentified Analyst]

Thank you, Matt, and congrats guys on the progress.

[Operator]

Our next question comes from Joseph Schwartz with SVB Leerink.

[Dae Gon, SVB Leerink]

This is Dae Gon dialing in for Joe. Congrats on all the progress. I had a question on DMD the platform strategy and then a question on Pompe. So with regards to DMD Matt on the prepared remarks Natalie talked about having a face-to-face discussion with the regulators. But I was just wondering if you could maybe elaborate on a little more of what came out of that discussion. So specifically I'm wondering what would an ideal development course look like based on this platform approach? I mean how much of a truncation in timeline can we anticipate if the FDA seems to be on board with this idea?

And then, in terms of Pompe; it's actually more of a two-part question but now that we're waiting on AT845 in Pompe disease there are obviously multiple agents that are either in the clinic or currently approved. So just wondering where do you necessarily see AT845 addressing the most in terms of treatment landscape since we have standard of care next-gen ERTs as well as lentiviral Pompe drugs in development? And then secondarily as we think about the trial design perhaps we're a little early here but I guess is it fair to assume that it's more of a Phase I/II with a long-term follow-up in safety that could get you to the finish line or is it more of a traditional development of Phase I/II followed by a Phase III trial?

[Matt Patterson, Chairman & CEO]

Sure, so lots in there Dae Gon. Thanks for the question and I'll start and ask Natalie to jump in. On Pompe Natalie said it in her opening remarks and it's really important to highlight once again in that we strongly believe that the specific scientific approach we are taking to use a promoter that focuses expression in the muscle in the tissue affected by the disease which can be contrasted with the liver-directed techniques will be the superior approach to helping these patients in the future. We base that on a lot of our own preclinical work as well as our own evaluation of the entire landscape. So we still feel very strongly about our approach as being optimal for Pompe gene therapy and so we're extremely excited to move into the clinic early in the year and get that started and show that. And as Natalie mentioned we're looking forward to sharing the preclinical data that we have for AT845 at the World meeting in February. We know that people have been looking to know when we would share that and so we're happy to confirm that today.

As far as the clinical plan for Pompe today I think what we can comfortably say is what we've been saying for a while which is we still expect to start in adults who are on ERT and that we will do dose ranging and with a focus initially on biopsies and in particular looking at special -- of DAA the missing protein; and that over time the program would mature to undoubtedly include weaning people off of ERT and evaluating their progress over time as well as expanding the program from adults to infantile Pompe in a separate study. That's certainly all going to happen as fast and in parallel as possible for us. I'd rather not speculate on what it might take in Pompe to get all the way to approval. I think that's a little early. We should collaborate with the FDA on that. But I do think that Pompe clinical development is a bit more complex than what we've done in MTM just simply because you've got adult population and an infantile population in particular. But we have a lot of Pompe experience from other rare disease companies around the table so we feel very confident that we've got a thoughtful plan in mind.

So that's -- I think it hopefully addresses Pompe. We look forward to sharing a little more detail on the clinical plan or full detail on the clinical plan once FDA completes reviewing the IND and we have their blessing to move forward.

On the Duchenne maybe I'll hand off to Natalie to let her answer your questions. Natalie?

[Natalie Holles, President & COO]

Happy to. Hi, Dae Gon. So as I mentioned we did have a really productive face-to-face meeting with FDA in September to talk through some of our thinking on this platform approach in Duchenne and there were really three buckets of development that we covered in the discussion: the nonclinical development so what would it take to get to IND for the first and then subsequent development constructs manufacturing and then what could some streamlined clinical development thoughts look like potentially.

On the nonclinical side we got good alignment on the plan which we've shared previously which is to do a robust IND-enabling package for the first construct AT702. And as I mentioned those studies are well underway and we're on track for the IND to be filed in the first quarter. Then the idea is with subsequent constructs we can leverage the dose ranging and toxicology data that we generate with 702 to put forth smaller packages for future INDs. And we would expect that over time as we accumulate a bigger body of data on how the platform behaves those requirements will go down further with subsequent constructs.

On the manufacturing side it was really a discussion of the fact that the manufacturing process is essentially identical for each of these constructs. The only thing that changes from product to product is one of the plasmids in our two-plasmid transient transfection system. And so we talked about ideas for streamlining analytical development process characterization that leverage the fact that we have this robust well-established manufacturing process at this point.

And then on the clinical side we talked about ideas for ways that we could potentially share safety databases share control groups across different genotypes. And so we're earlier on the clinical side because that's of course a little further off from the work that we're doing preclinically and in manufacturing right now. But I think in general the agency was really excited about the approach. They recognized the need to innovate not only in terms of the technologies but the design of the clinical program -- or the development programs -- to advance these novel technologies and so we're encouraged. And you know as we've said before we believe that this is a best-in-class approach to Duchenne that producing full-length or near full-length versions of dystrophin are going to result in an ultimately superior product profile.

[Dae Gon, SVB Leerink]

Excellent. If I can just squeeze in one more question on DMD you know I guess some of the microdystrophin players are going through some dose-related toxicities if you will. So if you can comment on DLTs that you may have seen in preclin studies if you have them. And then secondarily I guess as we're thinking about DMD those are obviously older patients that weigh more and so on a systemic dose basis I would imagine the total viral load would be higher. So how are you thinking about perhaps capping age in terms of inclusion or even body weight at inclusion criteria for the DMD studies?

[Natalie Holles, President & COO]

Matt, do you want me to take that?

[Matt Patterson, Chairman & CEO]

Yes, Natalie. Why don't you keep going on Duchenne? Go ahead.

[Natalie Holles, President & COO]

Sure, I'm happy to. So, it's really too early to comment on inclusion and exclusion criteria for our Duchenne program. You know I'll say this: we've got a good body of experience with high viral loads in our MTM program. The fact that we use AAV8 consistently across our programs allows us to leverage our existing body of data on biodistribution and safety of the capsid and so that's one of the things that we believe is really going to allow us to accelerate. And then in terms of dose limiting toxicities as I mentioned the tox study on 702 is underway. But I think one thing that it's important to remind you of is the fact that this is a fundamentally different mechanism. So we are delivering an snRNA that is going to repair existing endogenous dystrophin transcripts so we aren't over-expressing dystrophin. And so really your theoretical ceiling on dystrophin expression is 100% of wild type here. And the other thing that's important to note is that this is only active where dystrophin is naturally expressed. So we think that the safety profile of this approach versus you know in some cases super physiologic expression levels of a synthetic version of the protein has the potential to be a meaningful advantage for our approach.

[Dae Gon, SVB Leerink]

Great, thanks for taking our questions. And look forward to your data at World.

[Operator]

Our next question comes from Chris Raymond with Piper Jaffray.

[Chris Raymond, Piper Jaffray]

So first, on AT132. So just looking back at the data from World Muscle I mean obviously impressive data but that Patient 12 who I think had not seen a reduction in ventilator independence at week 20 just given that outcome and you know you've seen some variability over time and I was kind of heartened to hear that you've increased your patient size for the pivotal to five patients each. But you know you're going to have arguably some variability I guess in ventilator independence and with that endpoint of a reduction over placebo I think it's six hours at week-24. Can you just talk about comfort level given that you've got some variability as seen in that World Muscle update? Thanks. And I've got some follow-ups.

[Matt Patterson, Chairman & CEO]

Sure. Chris, it's Matt. I certainly appreciate the question. You know look I think it's a little early to draw any conclusions on Patient 12. We look forward to the upcoming data updates with him and filling out that story so I would encourage folks to not read too much into what we had at World Muscle in that specific case. But certainly what you're talking about generally is something that we put a tremendous amount of thought into. You know we obviously wanted to accommodate with our pivotal expansion plan all the agency feedback that we could. But you know even on the numbers we wouldn't have put together that plan if we didn't feel comfortable that even given some variability you might see patient to patient that we would hit our marks. And we felt strongly that we would do that eight and it's even better to be able to have 10 patients which was an opportunistic decision that we made to expand the cohort given the patient ID success. So you know I guess all I can say is that we're highly confident around the hallways as we go forward with that plan and we're looking forward to it next steps and sharing those data when we get them next year.

[Chris Raymond, Piper Jaffray]

Got it. And then, on Pompe; I just want to make sure I understand the dialogue with FDA. So your press release says the application is under review but just backing through the calendar it sounds like you might be outside that 30-day window traditionally where the FDA accepts the IND. Can you talk about that? Has the FDA accepted the IND or are they treating this application a little differently?

[Matt Patterson, Chairman & CEO]

No, it's a good question, and you're absolutely right on the calendar. We submitted late Q3 and it's really very simple actually. On day 30 the agency called and said we're sorry we're busy we haven't finished. And so it's really that simple. We haven't really received any meaningful feedback and they specifically said they need more time. So we expect that they'll take this extra 30 days which is not a foreign concept to us. First of all we know they're very busy and so we knew that there was the possibility this could happen. Obviously we were hoping for the 30-day clearance. But recall if you know the story -- our story -- from last year the same issue came up when we filed our CPVT IND in that the agency just didn't get to it and then 30 days later we got some simple questions that we responded to and the IND cleared. You know so it's just that.

And so we remain really confident in the IND. It's a very strong package and as Natalie said in her comments all the clinical work is happening. All the site startup activities are happening. The screening study is initiating and so our guidance remains that the study is going to start in Q1 and we have a high degree of confidence in that.

[Chris Raymond, Piper Jaffray]

Great. Okay, thanks. And then, if I could just sneak one more question in 702 I think last quarter you guys talked about NCH starting dosing with their own construct in Q4. Is that still the plan or I see you guys mentioned going ahead with your construct in Q1 of 2020. Just you know is that still the plan or has that been changed a little bit?

[Matt Patterson, Chairman & CEO]

Sure, sure. Natalie, why don't you take that one?

[Natalie Holles, President & COO]

Yes, I'm happy to. So you're absolutely right; we had been expecting NCH to file their IND and dose a patient this quarter. You'll recall that the FDA had asked for a more robust tox study since they had submitted a pretty skinny package the first time around. That study is complete looks great. NCH is in the process of putting together the IND. What you can see though is that the timelines on the programs are converging and we're now almost on top of each other in terms of the timing for the IND filing. So we're working with Dr. Flannigan to sort of harmonize the timelines and the approach and it remains to be seen whether he'll end up dosing a patient this quarter with his NCH construct or not. I think the important thing to focus on is that the registration construct if you will the one that we expect to move through clinical development and serve as the basis for the entire platform approach to Duchenne is our AT702 and the robust IND-enabling work that we're doing there is really what we're focused on. It's frankly what you should be focused on and we'll keep you posted as our discussions with Dr. Flanigan and the group at NCH continue to evolve.

[Matt Patterson, Chairman & CEO]

So, I guess what I'm getting at there is -- that's what I was assuming is that yours was perhaps in the lead or right on top. So would one assume then that you could avoid a number of bridging activities that were formerly contemplated?

[Natalie Holles, President & COO]

Yes. You know, actually as a reminder, we did not -- we decided not to take a bridging approach. So because we wanted to put a robust IND package around 702 because it has the new backbone if you will the work on the Audentes construct has proceeded in parallel with completing the legacy work on Dr. Flannigan's construct. And you know it was an obligation that we knew we were assuming when we entered the collaboration with him. He also knew that we wanted to refine the construct and make it a better product that could serve as the basis for the platform. And so really at this point it's a matter of timing.

[Operator]

Our next question comes from Anupam Rama with JPMorgan.

[Anupam Rama, JPMorgan]

I'm sorry, if I missed this. Can you remind us of the number of sites that you're targeting for the Pompe program and how we should be thinking about pace of enrollment given you've kind of already actively engaged with sites and if there's a chance that we might see some initial biomarker type of data in 2020? Thanks so much.

[Matt Patterson, Chairman & CEO]

You know, I think the team hasn't finalized the exact number of sites that are going to be involved in the program but we're off to a great start. It's been a really I think fun few months for the company to go out and interact with the various sites that we know well that have Pompe expertise that have Pompe patients. And I can say really comfortably that the reception has been extremely strong. I think people appreciate the quality of the preclinical data that we've shared with them and the nature of our approach and how it contrasts with others. There's a high degree of enthusiasm to be a part of the program so we'll clarify the exact number of sites as soon as we can. But certainly it will be enough sites to drive enrollment at a rapid pace. I'm sure we'll start in the same sort of staged manner just to monitor initial safety like just about every trial in our space. But all the patients we feel very good about the patient identification and as Natalie mentioned in the script too we're starting the screening study which will really facilitate getting patients lined up. So much like MTM and the Incepta study kind of queuing up patients for the trial we're doing something similar here so I think it will move quite rapidly.

[Anupam Rama, JPMorgan]

Great, thanks for taking the question.

[Matt Patterson, Chairman & CEO]

And I didn't answer your question, Anupam, about data. I think based on where we are today and based on our expectation that we'll start the study in Q1 we are sitting around assuming that we're likely to get to proof of concept data in the second half of 2020 at least initial proof of concept. It would be largely safety data of course but also biopsy-based information. But exact numbers and exact amount of data obviously we'll have to refine over time. But that's our working assumption and that's part of why we feel so excited about 2020. I mean we're staring at a year ahead where we're going to file a BLA for MTM we're going to start a clinical trial in Pompe and get to proof of concept data we're going to start a clinical trial in Duchenne and hopefully also get to proof of concept data and file an IND for myotonic. So it's a year of tremendous momentum across the pipeline that we're fired up for.

[Anupam Rama, JPMorgan]

Just as a clarification you said proof of concept for two programs Pompe and DMD?

[Matt Patterson, Chairman & CEO]

Pompe, we feel is going to start early in the year and so we feel good about that. But again I want to confirm that a little more later certainly after we get FDA's buy-off on the IND which we expect but as we see the study get started and I can confirm exactly how much data and when. But where the timeline sits today that's very reasonable. Duchenne as Natalie mentioned on track for a Q1 IND so one would expect a study start in Q2. And so again even though it's a little tighter it's three months later or so on the timeline it's not unreasonable to assume that we could get to preliminary proof of concept data there as well not just safety but biopsy-based data that I think could be quite compelling to continue to tell the scientific story about why we feel our approach in Duchenne is going to be superior.

[Operator]

Our next question comes from Whitney Ijem from Guggenheim.

[Unidentified Analyst]

This is Evan [ph] on for Whitney. I just have a question on XLMTM. Can you talk about kind of steps you're taking pre-commercial-wise to get ready to prepare for commercial readiness maybe on kind of identifying patients -- and thoughts of pricing?

[Matt Patterson, Chairman & CEO]

Sure. Thanks Evan, it's very active. You know obviously Natalie spoke to the program status or we both did and the manufacturing work and all that to get to the BLA and be ready. But the commercial team has grown. As you may recall we started the year hiring our chief commercial officer and he's done a wonderful job of building out his team and so it's an area of great activity. Patient ID is absolutely one of the top priorities and I would say that's going well. I mean we had historically done pretty well trying to find patients and in particular in the U.S. and Europe but they've really expanded on that with added resources and so we feel good about that. That's going to be an ongoing thing though. You know it's rare diseases. It always takes time to find all these patients and of course progress in the clinic and eventually an approved product go a long way to motivating people to help find patients. But that's certainly a focus and going well.

And you know your other point is the other key area of focus I would say is preparing for pricing and reimbursement discussions with payers. It's something that we obviously take very seriously. We've worked hard over time to build a background story about the burden of living with MTM and that's been pretty powerful stuff that we've continued to collect and look forward to sharing going forward the burden of not just living with the disease but the cost of living with the disease. And so we're really building out that story and preparing for future conversations with payers. Of course the clinical data is extremely powerful when we're going to be able to walk in there and talk about kids all of a sudden hitting milestone they've never hit and coming off of ventilators.

So, I think we're doing all the right work the clinical work clinical data supports it and so it's going to be a very strong story. But you know we realize that it's a really important and complex one and so that's why we're doing a tremendous amount of work early on. And of course we're learning from others. You know we're monitoring the space and seeing how some of the creative approaches that other companies in our field are approaching how to best commercialize these products given that we still currently live in a system that's not well prepared for single one-time curative therapies. But thankfully I think there's a lot of momentum in that area as well and we're in the thick of that. So I'd say it's off to a great start and it will be something that we really build on in 2020.

[Unidentified Analyst]

Okay. And if I could ask a follow-up on DMD; I'm just wondering kind of based on your interaction with FDA does it seem like the agency is thinking a little bit differently from what might be required for a prelim DMD kind of post --? Any changes in kind of feedback?

[Natalie Holles, President & COO]

You know, that wasn't really the nature of the discussion we had. We weren't talking specifically about endpoints that we would need to include for registration in Duchenne. It was more about the overall design of how do we efficiently address multiple genotypes in parallel? So it was really more of a question of study design than endpoints. I think it's a little too early yet to comment on registration endpoints for Duchenne. But of course one of the valuable things about being where we are is that we're keeping a close eye on the rest of the field and learning from others in terms of endpoints. And also actually doing a lot of internal research on our own looking at novel ways that we can measure efficacy in Duchenne beyond sort of the standard metrics that are used now.

[Unidentified Analyst]

Okay. And can you give any more -- is there any more detail you can give on the undisclosed partner in DMD?

[Natalie Holles, President & COO]

The undisclosed academic partner on 751 and 753?

[Unidentified Analyst]

Yes.

[Natalie Holles, President & COO]

We haven't said more publicly about that to date. I'll say that the work is ongoing and it's a great collaboration. We're really excited about it but we haven't shared more publicly so far.

[Unidentified Analyst]

And was there an undisclosed commercial partner in DMD as well?

[Natalie Holles, President & COO]

No, we retain global commercial rights to all of our programs.

[Operator]

Our next question comes from Ritu Baral from Cowen.

[Unidentified Analyst]

This is [indiscernible] on for Ritu. Thanks for taking the question; just two for me. The first one is I think moving forward can you just give us a sense on CapEx spending on manufacturing and just is like the current facilities enough as you move into commercialization for XLMTM and then also the Pompe and DMD programs that are coming up?

[Matt Patterson, Chairman & CEO]

Sure, I can start. And Tom, if you want to chime in that'd be fine. I mean the most important thing to remember is that we've done extremely well with our manufacturing process and improving it over time and so the current capacity in our two 500-liter bioreactors that we manufacture in in our South San Francisco facility is enough capacity to serve the global commercial demand for MTM as well as the near-term clinical development of Pompe Duchenne and myotonic. So we're in great shape right now and so there's no urgent need for big capital spend. There's some spend necessary I would say to get to licensure just some basic things with the facility to make sure that it's in tip-top shape for inspection. But otherwise nothing major.

That being said of course we have an eye for the future and we plan on success for all these programs. And so I think at some point reasonably soon we'll have more information on our plans for how we are going to go at expanding capacity which we will need to do to accommodate of course future commercialization of Pompe and Duchenne. And so that's a work in progress and we look forward to sharing more info there.

[Unidentified Analyst]

Okay, thanks. And then, a quick question on DMD. And just thinking about the field as a whole and the multiple clinical trials that are going on right now I'm wondering how you guys are thinking about just enrollment into the trials moving forward. Any concern for possibilities with finding patients more so in the 51 52 population than the exon-2 that you're looking at?

[Matt Patterson, Chairman & CEO]

Sure. I don't know. Natalie, do you want to tackle that one?

[Natalie Holles, President & COO]

Yes, I can start there. So we're starting with AT702 which is addressing duplications in exon-2 and/or mutations in exons 1 to 5. Those mutations are actually outside of the inclusion criteria for the microdystrophin studies and so we don't expect to have any issues there. And then one of the important elements of our clinical strategy is to generate data as early as possible demonstrating the differentiation of our approach demonstrating that we can -- we are producing full length or near full length dystrophin and that that's preserving superior functionality of this important structural protein. And we think with those data in hand we're going to be in a very good competitive position in terms of patient recruitment.

You know, it's similar to what we're seeing in Pompe. As we're going out and talking with potential investigators about our approach and the nonclinical data we're seeing a lot of enthusiasm. They're understanding that the approach that we're taking is meaningfully different and likely to be superior. And so we expect to employ a similar strategy in Duchenne -- generate the data to show that our approach is best in class and then the patient enrollment follows from there.

[Operator]

Our next question comes from Steve Seedhouse of Raymond James.

[Steve Seedhouse, Raymond James]

So, I wanted to ask the FDA's relationship with AveXis and its gene therapy programs has been rough lately so I was kind of hoping to clear the deck on some of the issues that have come up there. So first they put obviously their type 2 SMA study on hold over concerns of dorsal root ganglion toxicity. Have you seen or assessed DOG talks? Has the FDA reached out at all regarding specific assays or data subsequent to their investigation of AveXis based on your preclinical work for either XLM or in particular I guess now the NCH program getting underway? That's question one.

[Matt Patterson, Chairman & CEO]

Steve, it's Matt. Certainly we're obviously aware of that news but I can reassure everyone that we've never observed such events in our preclinical work or certainly our clinical. So we have no experience with that specifically and we have not heard anything specific from FDA asking questions about our program that relate to that subject. So all's quiet on that front and really that's about it. There's not much more. I'd rather not speculate on what's exactly going on there just not knowing all the details. But at least as far as we're concerned we haven't seen it and we haven't heard from FDA.

[Steve Seedhouse, Raymond James]

Okay, I appreciate that. That's good to know. And just regarding preclinical work then so the high -- the dose that you're using in the pivotal XLMTM cohort 3x10

[Matt Patterson, Chairman & CEO]

Sure. So in MTM, we did multiple preclinical studies overtime. There was mouse work, there was of course, the naturally occurring dog model in which we also did dose ranging work. And then for a true safety assessment we did GLP toxicology in nonhuman primates that went up to 8x10

[Steve Seedhouse, Raymond James]

Okay. Just last detail on that to follow-up when you think about the 8 versus 3 then -- I think the orders of magnitude were the same if I heard that correct -- is there any adjustment based on PK modeling or whatever in different species or is that a one-to-one comparison? So you have call it two and a half two to threefold coverage based on the preclinical work.

[Matt Patterson, Chairman & CEO]

I guess unless someone else feels differently I would say we think of the primates as the best model and so we sort of think of it as a one-to-one versus humans. But you know there's no model as good as humans when you're talking about a virus like this but nonetheless it's the best available opportunity for assessing safety and so that's why we include it in our programs. And certainly in MTM the data were strongly supportive of safety.

[Operator]

Our next question comes from Rajiv Prasad with William Blair.

[Rajiv Prasad, William Blair]

Just a question on the Pompe program. Can you just speak kind of directionally to this construct that's currently in non-D submission versus the previous construct? Obviously is it the safety issues? You've got obviously -- and corrected. But from a potency perspective or a biodistribution perspective can you just kind of talk to that? And then kind of in your prepared remarks you mentioned the potential superiority of your approach versus some of the other approaches. Have you kind of taken out the liver-directed or kind of optimized for going more towards the muscle expression of GAA? And if not just thinking about how the GAA expression liver from your construct would work. Thanks.

[Matt Patterson, Chairman & CEO]

So, let's see yeah just a quick reminder for folks: The change we made to the product after we had the setback last year was with the promoter but everything else about our approach is unchanged -- AAV8 serotype systemic administration still targeting primarily expression in muscle. And so that was really the only change and it was based on a tremendous amount of work in both primates and the mouse model and a real thorough understanding of what we observed. And I think in the end it was just a matter of fine-tuning to make sure you're getting the right level of expression of the GAA protein in all the right places. So and once again I mean the preclinical data are very strong. I know we haven't shared that yet but we look forward to it at World and it certainly strongly supports the IND filing and starting the clinical trial.

As far as the liver element you know right now we're not speaking about the specific details of the promoter but I can assure you that we are focused primarily on getting expression in muscle. That is the tissue where Pompe manifests and that is the most important in this equation so you can bet that that's the case and over time we'll share more information about it. But this is a muscle-directed expression approach without question.

[Rajiv Prasad, William Blair]

Great. And is that disease-specific or is that something that you're taking over into DMD as well as far as with the promoter use?

[Matt Patterson, Chairman & CEO]

It's a different scientific approach. Remember in DMD you're doing vectorized exon skipping. So as Natalie described it's a different type of promoter situation than the protein expression that we're doing directly with Pompe. But happy to go through that again or Natalie can go back through that again if that would be helpful.

[Rajiv Prasad, William Blair]

We can follow-up later, no worries. Thanks.

[Operator]

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

[Matthew Luchini, BMO Capital Market]

First, I wanted to come back to your interactions with FDA in the context of DMD. Appreciate in the prepared remarks that there was a description of the interactions of having general alignment and I heard the additional color around potential concerns stemming from AveXis. I just wanted to confirm that there are -- or ask if there were any spots where there perhaps wasn't alignment yet specifically in the nonclinical or CMC. I recognize that in the clinical development side things may be a little early.

[Natalie Holles, President & COO]

Matt, would you like me to take that one?

[Matt Patterson, Chairman & CEO]

Yes. Sure, go ahead.

[Natalie Holles, President & COO]

Absolutely. I would say there were no areas of obvious misalignment in the nonclinical and manufacturing areas. We had the data in hand that was generated with the NCH construct just to sort of provide a biologic overview of the approach and that served as the basis for outlining what a nonclinical IND-enabling package would look like for the first construct and then subsequent constructs. And then on the manufacturing side it was a great discussion because this is one of the great strengths of our manufacturing operation is that our manufacturing platform is essentially construct agnostic. And so we can leverage not only data that we're generating from AT702 the first construct in Duchenne but the data that we've recently generated with our GMP campaign for 845 as well.

So, yes I think that because the biologic mechanism that we are proposing here is unique and because of the experience that we have in our manufacturing process and operation it was a really cordial and sort of enthusiastic interaction with FDA. I think we're coming in very good stead and coming from a position of strength in proposing this platform approach.

[Matthew Luchini, BMO Capital Market]

Great, thanks. And just one more on AT702. Can you just remind us is the ability for you to file your IND in any way dependent on what happens with the NCH's IND?

[Natalie Holles, President & COO]

Thanks for the question; it's a good one to clarify. The answer is no. So again we did -- well we're in the process of completing a dose-finding study in the dup 2 mouse model and a primate toxicology study on our construct. Those two studies will serve as the basis for our IND so there's no requirement to bridge back to the data package on the previous construct.

[Operator]

And we have time for one further question. Our next question comes from Difei Yang with Mizuho.

[Unidentified Analyst]

This is Alex [ph] on Difei. Thanks for taking the question and congrats on the continued progress. I had a quick one on Pompe. We know you're targeting muscle tissue directly and we also know that the CNS is an important tissue affected in the disease. I'm wondering if you can speak to how your construct could potentially address CNS involvement in Pompe disease.

[Matt Patterson, Chairman & CEO]

Thanks for the question, Alex. The point is well taken. I would say that with time we've learned that there's at least a subset of Pompe patients for whom CNS involvement is important and so it's something that we do take seriously. I would say however that starting out our focus is really on ensuring muscle expression primarily which is critical for all patients. We are continuing to think about ways that we can ensure that CNS is also properly treated but I think there's some complexity there and you need to do the right research and understand exactly what cell types are most affected and find a way to treat them with the best approach. And so we're not ruling out the possibility that we'll get expression in the CNS with the existing construct but our focus is ensuring muscle expression. And as we learn more from the work we're doing we'll be looking at ways to consider expanding the program to ensure we treat the CNS in the patients for whom it's an important issue. Hopefully that helps and it's going to be fun and interesting conversation going forward.

[Operator]

Thank you and at this time I'd like to turn the call back to Matt Patterson for any closing remarks.

[Matt Patterson, Chairman & CEO]

Well, thank you everyone for joining us this afternoon and for the opportunity to share our updates. We look forward to a busy remainder of 2019 and of course a really exciting 2020 to come. So we'll look forward to speaking again soon.

Operator that concludes our call today.

[Operator]

Thank you, ladies and gentlemen. This concludes our conference call. Thank you for participating. You may now disconnect.