Passage Bio, Inc. (NASDAQ:PASG) Second Quarter 2022 Earnings Conference Call August 4, 2022 8:30 a. m. m. ET
Participating companies
Stuart Henderson – Vice President of Corporate Development and IR
Edgar Cale – Interim Executive Director
Simona King – Chief Financial Officer
Mark Forman – Managing Director
Conference Call Participants
Brendan Smith – Cowen
Neena Bitritto-Garg – Citi
Alex Nackenoff-Raymond James
Laura Chico – Wedbush
Operator
Hello and welcome to the call for the Passage Bio convention on the monetary and operating results of the current quarter of 2022. [Operator Instructions] Please note that this call is recorded at the request of the company.
I would now like to speak with Stuart Henderson, Vice President of Corporate Development and Investor Relations. Stuart, continue.
Stuart Henderson
Thank you, operator. This morning, we issued a press release outlining the topics we plan to talk about today. This press release can be found on Passage Bio’s online page in the Press Releases and Investor Statements and News section. During today’s call, Chip Cale, Acting Chief Executive Officer, will review our timing of the 2022 quarter and highlights of the recent business; Mark Forman, our chief medical officer, will review our clinical programs; and Simona King, our Chief Financial Officer, will review our monetary results for the current quarter of 2022.
Before we begin, please note that today’s call may come with a number of forward-looking statements, adding, but not limited to, comments on our expectations related to the timing and execution of planned milestones, adding the initiation of clinical trials and leveraging clinical knowledge from such trials; our expectations related to the ability of our employees and partners to execute key initiatives; the ability of our key product applicants to treat their respective target CNS disorder; production plans and strategies; trends in monetary functionality and money flow; the company’s ability to fund studies and progression programs; the effect of the COVID-19 pandemic on the company’s operations; and his ability to manage prices, as well as the use of money and other matters.
These forward-looking statements are based on assumptions that are subject to threats and uncertainties that may cause the Actual Effects of the Company to differ materially from those reported through such statements. Given these threats and uncertainties, you do not place undue reliance on those forward-looking statements. forward-looking statements. Please refer to the Company’s filings with the SEC for information on points of threat that may cause their actual effects to differ materially from expectations, adding forward-looking statements made in this call. Except as required by law, the Company disclaims any legal responsibility to publicly update or revise any forward-looking statements to reflect or reflect occasions or occurrences that occur after such call.
Now I have the thrill of passing the call to Chip Cale. Chip?
Edgar Cale
Thank you, Stuart, and thank you all for being with us this morning. We continue to make significant progress in advancing our systems in our project to scale transformative treatments for devastating CNS disorders with limited or no remedy options. As we move through our 3 ongoing clinical systems, we take a look at several clinical value creation milestones in the current part of this year.
These milestones build on several recent achievements, including: first, a strong push forward for our Imagine-1 trial for GM1 gangliosidosis. We have now progressed through the study to the last cohort, cohort 4, in the dose-escalation phase of the trial and are pleased to have begun receiving patients for this cohort. Second
Mark will review this information in more detail in a while and we hope to share the initial information from cohorts 2 and 3 later this year. FOURTH CONSECUTIVE IND approval as a company and our third rare pediatric lysosomal garage disorder program to succeed in clinical development.
This approval is a testament to the strong analytical and CMC functions we have developed in-house at our CMC lab in New Jersey and the high-quality preclinical knowledge that supports the program through our strong partnership with Penn’s genetic treatment program.
In addition, we continued with more patients in Cohort 1 of our GALax-C clinical trial for Krabbe disease in the early years of training and hope to report initial insights from a subset of Cohort 1 through the end of the year. In accordance with our existing guidelines, we also plan to dose the first patient in our upliFT-D clinical trial for frontotemporal dementia in the near future.
Running clinical trials remains a key priority for us. We have established a global network of trial sites in each of our ongoing clinical systems with active sites in the United States, Brazil, Canada, the United Kingdom, Israel and the Netherlands. We also continue to employ a variety of methods to identify patients in our systems, adding several projects aimed at identifying patients with frontotemporal dementia with a granulin mutation.
These efforts have seen increased genetic testing on FTD patients in recent months. Our execution is based on a strong cash position, which we will fund the continuation of our business through the current quarter of 2024. Finally, we are very pleased to have recently added Michael Kamarck, PhD, to our Board of Directors. Kamarck is an experienced biopharmaceutical executive with over 40 years of experience in discovery research, procedure development and technical operations. We look forward to your experience.
That said, I now give the floor to our chief medical officer, Mark Forman, who will review the progress made in our ongoing clinical programs.
marc form
Thank you, Puce. First of all, let me talk about our main program PBGM01 for GM1 gangliosidosis. GM1 is a fatal neurological lysosomal disease caused by a mutation in the GLB1 gene that affects the low activity of the enzyme beta-galactosidase. to immediate neurological deterioration and in the most severe form, unfortunately, mortality within a few years. GM1 patients are a rare and neglected population and ultimately there is no disease-modifying remedy for their disease.
Our Imagine-1 clinical trial focuses on the early and past bureaucracy of the GM1 formative years, which are the most serious bureaucracy of the disease. across age and dose level. As a reminder,
We were pleased to report the updated positive interim protection, biomarker, and clinical efficacy knowledge from Cohort 1 to asGCT in May. This knowledge shows that the low dose of PBGM01 was well tolerated and had a favorable protection profile with patient 1 knowledge for thirteen months and patient 2 knowledge for 7 months. No serious adverse events, headaches similar to MHI treatment, and no symptoms of dorsal root node toxicity were observed in any of the patients.
Both patients showed continuous improvement in progression spaces on Vineland-II, a caregiver-rated scale, and Bayley 3, an investigator-rated scale after PBGM01 administration. Patient 1 showed an improvement in all spaces of progression in the 12-month evaluation with remarkable progression in the motor and linguistic domains.
Patient two showed improvement in several progression spaces despite a serious delay in progression at baseline and a history of regression. a continuous and significant improvement in the stages of progression of these children, adding the resumption of the lost stages.
Volumetric MRI data showed a significant expansion in brain volume for patient 1, who was 15 months old at the time of gene transfer. Patient two, who had a severe developmental delay at baseline and 31 months at the time of gene transfer, showed a slight minimum in the brain. volume after – compared to baseline at 6 months.
Knowledge of longer-term biomarkers for beta-galactosidase enzyme activity in CSF and serum showed functional expression of the transgene. As Chip mentioned, our Imagine-1 trial had a boost. To date, we have dosed a total of five patients in the study, completed dosing of low-dose cohorts 1 and 3 in patients of late and early formative years, respectively, and administered the first patient in cohort 2 of late high-dose formative years.
Following the positive review of interim protective data for cohort 3 through the Independent Data Monitoring Committee, we are pleased to have now complexed patient study for cohort four with high doses of GM1 in the early years of training. This is the last cohort of patients in the Dose Escalation Phase of the study. We remain on track to report initial protection and biomarker data for cohorts 2 and 3 in the current part of 2022.
Now let’s move on to our global PBKR03 GALax-C program, which is an open-label dose escalation examination in krabbe disease patients in the early formative years. Krabbe disease is a progressive disease, which damages the brain and peripheral nervous system, resulting in a life expectancy of only two years in severe cases. Krabbe disease is a fatal neurological lysosomal garage disease caused by a mutation in the GALC gene that affects the decreased enzymatic activity of galactosylceremamineosis.
Like GM1, it is also pediatric leukodystrophy and lysosomal overload disease with an underserved population and devastating disease progression. manifestations of peripheral diseases.
We have dosed the first patient in the patient and are actively enrolling more patients in cohort 1. We hope to offer initial protection and biomarker knowledge for a subset of cohort 1 by the end of 2022. Our third clinical program, PBFT02, is for frontotemporal dementia with granular mutations. FTD is a devastating form of early-onset dementia that affects patients between the ages of 40 and 65.
The form of the disease we seek to treat with our treatment is caused by a mutation in the granulin gene or GRN, leading to a progranulin deficiency. It is estimated that about 5% to 10% of FTDs are caused by a mutation using the AAV1 capsid to deliver the supply of MCI from the GRN gene to the CSF.
As a reminder, the study design consists of 2 cohorts of 3 patients receiving another 2 increasing doses of PBFT02 with an optional third cohort treated at a higher dose based on the effects of protective data and biomarkers observed in the first 2 cohorts. It now has 3 active clinical trial sites, adding 2 in the US. And 1 in Brazil, and activation efforts at other sites continue.
We also continue to employ a variety of patient identification initiatives, adding efforts to develop genetic testing on FTD patients. We now know potential patients with a granulin mutation who will possibly soon administer the dose to the first patient in the study. move on to PBML04, our program for metachromatic leukodystrophy or MLD. Childhood MLD is a fatal inherited disease caused by mutations in ARSA or the arylsulfatase A gene,
MLD is characterized by muscle weakness, stiffness, gait disorders, and developmental delays, and sadly, children die regularly before age 5. The global incidence is about 1 in 100,000 live births. Our technique is similar to our GM1 and Krabbe technique, the same patented AAVhu68 capsid and the delivery of ICM for ARSA explicit and potentially treat the central nerve formula and peripheral manifestations of this devastating disease.
In June we announced that the FDA had approved our IND, marking our fourth IND approval as a company and our third pediatric lysosomal garage disorder program for clinical development. We are thrilled to have reached this milestone and are excited about the promise of our prospective therapy. . As we continue to compare our resources and operating expenses,
With that, I will now call Simona to review our finances.
simone king
Thank you, Marc. Before reviewing our quarter expenses, I would like to reiterate our strong monetary position. As we reported in our press release this morning, we ended the current quarter with approximately $239. 3 million in money, money equivalents and marketable securities. , compared to $267. 1 million as of March 31, 2022. We continue to expect those existing cash resources to fund operations in the second quarter of 2024 and continue to manage our money conscientiously to ensure we can achieve significant clinical milestones in the coming quarters.
expenditure R
This amount was partially offset by increases of $4. 6 million in clinical operating expenses, expenses related to the Penn agreement, facilities and other expenses. General and administrative expenses were $13 million for the 3 months ended June 30, 2022, compared to $15. 4 million for the same quarter of 2021.
The reduction is basically due to a $2. 3 million relief in personnel expenses and stock-based reimbursement similar to the restructuring of our workforce, which was partially offset by severance bills incurred in the 3 months ended June 30, 2022 similar to the separation from our Chief Executive Officer. Net loss was $39. 5 million for the 3 months ended June 30, 2022, compared to $48. 4 million in the same quarter of 2021.
Let me now turn back to Chip for the final comments.
Edgar Cale
With 3 ongoing clinical systems and analytical capabilities, we believe we are well placed to achieve several vital milestones in the coming months. We continue to enjoy strong momentum in our Imagine-1 trial and hope to inform initial knowledge of cohorts 2 and 3 at the time of part of 2022.
Additional steps expected in the short term include: first, reporting the initial protection and biomarker knowledge of a subset of Cohort 1 of our GALax-C trial through the end of 2022 and second, as directed, administering the first patient in our upliFT-D trial soon. Before answering your questions, I would like to thank the patients, families, and investigators of the trial, as well as the workers at Passage Bio and our colleagues in the genetic treatment program for their determination with our mission.
With that, I would like to open the for your questions. Operator?
Q&A session
Operator
[Operator Instructions] The first comes from Brendan Smith’s lineage with Cowen. Your line is open.
Brendan Smith
Just a few quick questions from us. Sorry if I missed that. But for Krabbe’s initial knowledge and, in fact, perhaps for the GM1 update also in the middle of the moment, is this something we’re probably looking forward to as a press release or are you looking for something more formal like a medical meeting?And then, very temporarily for MLD, could you maybe explain your resolution for clinical progression at this point a little bit?
Is that something we would see for other piping systems?Is it more of a way to strategize and prioritize existing systems that you have in the clinic or does it have something to do with the drug itself?
Edgar Cale
Brendan, thanks for the questions. So first of all, I think about Krabbe knowledge and GM1 knowledge, lately we’re comparing the most productive way to publish that knowledge. We will discuss whether it makes sense to do so at a clinical conference, but if not, it depends on when the information arrives and the time of the meetings or we would consider a press release. So, this is yet to be determined, but we are in all the other alternatives.
On your consultation on MLD and the resolution to suspend further development. As we said earlier, it’s not about the asset itself. This is our assessment of our existing monetary scenario and priorities. So, we’re just comparing the most productive way to move forward and prioritize the assets we want to prioritize.
Operator
The next one comes from Neena Bitritto-Garg’s lineage with Citi. Your line is open.
Neena Bitritto-Garg
I was just wondering if you could give us an update on some of the protective opportunities you saw in the initial patient who won a dose of PBKR03. And I’m curious about how many more patients you’ve built and if you’ve noticed similar signs of protection?And then in PBFT02, it turns out that he’s met some patients, so he’s a little curious about what’s causing at least the first patient to get the dose there.
Edgar Cale
Neena, I will pass the floor to Mark to communicate the security opportunities that we have noticed with PBKR03. But at FTD, in accordance with our guidelines, we are pleased to announce that we plan to dose within a while and that this is the result of the patient identification activities we have conducted. So I’m going to pass the floor to Mark to let him know about the security issues in krabbe’s asset.
marc form
Therefore, as we revealed above, our first patient approximately 30 days after treatment evolved into the adverse event of acute hydrocephalus. This patient who was placed a ventriculoperitoneal shunt with the intention of decreasing the accumulation of cerebrospinal fluid in the brain, which is a folk remedy. for hydrocephalus. This patient has followed this procedure well and lately it is solid and the SAE has been updated. As a result of this SAE and as we said earlier, we have updated the protocol to provide greater protection. Follow-up and this has now, and now we are actively enrolling more patients for this study, but we have not dosed any for -Date.
Operator
The next one comes from the line of Madison Elsaadi with Raymond James. Your line is open.
Alex Nackenoff
It’s Alex for Danielle Brill. Neena, you stole my questions. But I just wanted to see what expansion to more sites for SCD recruitment, how this effort is going, and what kind of influx of patients – I think COVID is a primary fear related to screening efforts and I sought to know if they are affected by any of them Point BA, regardless of the variants for patient recruitment in this study?
Edgar Cale
I think I will pass the floor to Mark to tell him the latest developments related to the expansion of our site and patient identity activities and how it can be done with screening. But just as a general comment. As we’ve discussed over the past few quarters, we’ve focused a lot on our patient identity efforts and we think we’re starting to reap benefits from it. But with that, I give the floor to Mark.
marc form
In accordance with all of our programs, we take a comprehensive approach to the FTD program. To date, we have 3 active clinical sites following the recent activation of test sites in Houston and Brazil. Therefore, we now have 2 sites open in the United States and 1 in Brazil. We are actively working to open a site in other countries and hope that they will bear fruit in the coming months. In terms of patient identity, again, as Chip said, we’re excited to be able to manage our first patient. soon and we believe it is a direct result of our patient identity efforts than we — us
We also work heavily with each of our examination investigators to expand individualized plans for patient identification and recruitment. And finally, we are conducting an extensive awareness campaign with physical care providers to inform them of the availability and benefits of our genetic testing program. The efforts have resulted in a significant increase in genetic testing in FTD patients with our sponsored genetic testing systems over the past 3 months and are encouraging. We’ve met several Americans, several patients with GRN mutations and those are the patients. who are being recently evaluated to determine the availability of the exam. But again, we plan to dose our first patient in the near future.
Operator
Our next one comes from Laura Chico’s lineage with Wedbush. Your line is open.
laura boy
Me for joining a little late. I only had 2 questions. First of all, FTD recruitment, I guess I just wanted to clarify it. Is the bottleneck here necessarily a diagnostic challenge or is there something else at stake in terms of the competitive environment alone?So I for lacking that. Any update similar to the search for CEOs?
Edgar Cale
I think I’ll respond to your timing first and then I’ll pass the floor to Mark to let him know about FTD recruitment. But when it comes to the SEARCH for CEOs, the board hired Russell Reynolds to conduct a public search for the new CEO. The search is active and the board evaluates potential applicants and is progressing well.
As studies continue, our strong and knowledgeable control team remains focused on driving the execution of our short-term milestones and managing our cash flow. With that, I will pass the floor to Mark to communicate the problems and what we are doing. to deal with FTD hiring issues.
marc form
So, I think the demanding recruitment situations we’ve faced are multifactorial. First, there is, I mean, a critical factor is the identity of the patient and that’s where our great outreach efforts are running to build these types of passes. it is in fact a festival with other corporations that have – that have active judgments.
But eventually, known patients will have to meet the eligibility criteria in an obvious way. So it’s a mixture of all those factors. But again, I think to reiterate, the efforts we’ve made to raise awareness and develop our genetic testing performance are paying off and we now have a cohort of Americans being tested for eligibility.
Operator
Merci. Et I don’t show any more questions in the queue at this time. Ladies and gentlemen, thank you for participating in today’s convention call. This concludes their program and they can log out. Everyone, have a nice day.