Greetings. Welcome to the Taysha Gene Therapies Second Quarter 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will hold a brief question-and-answer session. As a reminder, this call is being recorded today, August 11, 2022. I'll now turn the call over to Dr. Kimberly Lee, Chief Corporate Affairs Officer. Please go ahead.

Good morning, and welcome to Taysha's Second Quarter 2022 Financial Results and Corporate Update Conference Call. Joining me on today's call are RA Session, II Taysha's President, Founder and CEO; Dr. Frederick Porter, Chief Technical Officer; Dr. Suyash Prasad, Chief Medical Officer and Head of R&D; and Kamran Alam, Chief Financial Officer. After our formal remarks, we will conduct a question-and-answer session and instructions will follow at that time. Earlier today, Taysha issued a press release announcing financial results for the second quarter ending June 30, 2022. A copy of this press release is available on the company's website and through our SEC filings. Please note that on today's call, we will be making forward-looking statements, including statements relating to the safety and efficacy and the therapeutic and commercial potential of our investigational product candidates. These statements may include the expected timing and results of clinical trials for our product candidates, our expectations regarding the data necessary to support regulatory approval of TSHA-120 and the regulatory status and market opportunity for those programs as well as Taysha's manufacturing plans. This call may also contain forward-looking statements relating to Taysha's growth and future operating results, discovery and development of product candidates, strategic alliances and intellectual property, as well as matters that are not of historical facts or information. Various risks may cause Taysha's actual results to differ materially from those stated or implied in such forward-looking statements. These risks include the uncertainties related to the timing and results of clinical trials and preclinical studies of our product candidates, or dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protection for discoveries, limitations imposed by patents owned or controlled by third parties and the requirements of substantial funding to conduct our research and development activities. For a list in description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 11, 2022. Taysha undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities law. I would now like to turn the call over to our President, Founder and CEO, RA Session II. RA?

Thanks, RA, and good morning, everyone. In the next few slides, I'll review our manufacturing progress for the GAN program and our comparability package that supports the transition to our final commercial manufacturing process. Next slide. Our manufacturing development program for TSHA-120 was kicked off in mid-2021, one we initiated our partnership with our CDMO partner to deliver our commercial-ready manufacturing process. We've rapidly executed several tech transfer runs leading up to production of our 500-litre pivotal batch in April of this year. In parallel, we progressed several key analytical development efforts internally to deliver a comprehensive data package to support product release and comparability in line with agency guidance for pivotal stage programs. Next slide. Our commercial grade manufacturing run was highly productive, yielding over 200 vials of finished drug product filled into 2 separate lots that are currently undergoing release testing. After inspection and testing, over 50 patient doses are available for clinical use. In addition to supporting the ongoing clinical study, these lots were enrolled in a comprehensive stability study to provide critical shelf-life data in support of our BLA filing. The 500-litre production also represents our final commercial scale, which aligns with our commercial projections. We believe this high-yielding process supports a favorable cost of goods and ensures us that we will be able to meet commercial demand with a reasonable number of batches annually. Next slide. In considering the analytical panel for product release and comparability, there are 4 key areas of importance for gene therapies, strength, purity, potency and safety. These important attributes have informed the panel of assays that were in the process of validating at our CDMO partner to support both product release and comparability. The analytical method selected aligned with agency expectations in terms of accuracy, precision and robustness for measuring…

Thank you, Fred, and good morning, everyone. As RA noted earlier, we continue to make notable progress in advancing our clinical programs for GAN and Rett Syndrome and expect exciting milestones throughout the remainder of the year. I'll begin with recent updates on TSHA-120 for GAN. Building on the positive clinical efficacy and safety data and long-term durability data that we reported earlier this year, we are pleased to report new nerve conduction study data for TSHA-120 in GAN. We are grateful to our partners of the NINDS for leading the GAN natural history study and the interventional trial under the leadership of Dr. Carsten Bonnemann, principal investigator at the NIH. Next slide. Nerve conduction studies are a neurophysiological measure and the specific measure of relevance to GAN is the sensory nerve action potential or SNAP which is considered a definitive clinical endpoint. The test is performed by applying an electrical stimulus to the sensory nerve fibers and recording the actual potential at a point further along the nerve. There are 3 main parameters. The first is the amplitude of the action potential, which is the peak-to-baseline measurement and functional significance is that this is related to the number of axons in a nerve. With axonal degeneration neuropathies, the primary feature is a markedly reduced sensory nerve action potential or SNAP amplitude. The next parameter is latency, which is the time from stimulus to an initial electrical deflection. This can be compromised in the demyelinated neuropathies. Lastly, conduction velocity is the speed with which the electrical signal travels down the nerve. This can be affected by axonal loss, but more so with demyelination. The NIH natural history study suggest rapid and irreversible decline in centric function early in life in patients with GAN. SNAPs are within the normal range early…

Thank you, Suyash. This morning, I will discuss key aspects of our financial results for the second quarter ended June 30, 2022. More details can be found in our Form 10-Q, which will be filed with the SEC shortly. Next slide. As indicated in our press release today, research and development expenses were $23.1 million for the 3 months ended June 30, 2022, compared to $30.6 million for the 3 months ended June 30, 2021. The $7.5 million decrease was primarily attributable to a decrease of $3.8 million in third-party R&D primarily related to GLP toxicology studies, a decrease of $3.2 million in R&D manufacturing costs and lower employee compensation expenses of $0.5 million. General and administrative expenses were $9.9 million for the 3 months ended June 30, 2022, compared to $10.1 million for the 3 months ended June 30, 2021. The decrease of approximately $0.2 million was primarily attributable to a decrease of $1.1 million in professional fees related to market research, recruiting, accounting and patient advocacy activities. This was partially offset by $0.9 million of incremental employee compensation expenses. Net loss for the 3 months ended June 30, 2022, with $33.9 million or $0.84 per share as compared to a net loss of $40.9 million or $1.09 per share for the 3 months ended June 30, 2021. As of June 30, 2022, the company had cash and cash equivalents of $66.2 million compared to $149.1 million on December 31, 2021. Taysha continues to expect that its current cash and cash equivalents in addition to full access to existing term loan facility, is sufficient to fund operating expenses into the fourth quarter of 2023. And with that, I will hand the call back to RA.

Thank you and at this time, we'll be conducting a question-and-answer session. [Operator Instruction] And our first question comes from the line of Joon Lee with Jo Securities. Please proceed with your question.

Good morning, thanks for taking questions. My name is Joon. I'm just wondering, have there been any discussions with the FDA on regulatory lamina for 120, just thinking mostly in terms of the 3 scenarios that you've previously laid out on whether or not the FDA might have to redose patients with GMP material. Also, if such discussions have occurred, will the safety data be sufficient? Or has the FDA made or indicated additional need for efficacy biomarker or clinical data? Thank you.

I think you said it all, all right.

Thank you, and then if I could just ask the yield of the 50 doses that you've already manufactured, will that support the highest dose that was tested in clinical trials for all 50 of the doses that are ready to go? Thank you.

And our next question comes from the line of Gil Blum with Needham & Company. Please proceed with your question.

So just a question to clarify and make sure that I fully understand this. The additional regulatory feedback that we will be getting by year-end 2022, is this a change from previous estimates?

Okay. And maybe a question on SNAP. How it's established was SNAP as a surrogate endpoint for function and GAN. I mean it is very -- it is remarkable to see something going from zero to something, but just to help us understand the functional benefits.

Sure. Oh yeah hi Gil, I think that this is really the first ever time SNAP amplitude data, SNAP data in general has been presented or published for a large body of patients with GAN. And it is quite remarkable. It's quite -- what is notable here is the consistency of what you see in the natural history and how it mirrors clinical progress of these patients. You saw in the earlier image that around the age of 2, the SNAPs are well within the normal range, and they rapidly decline from the age of about two and a half to 3 to the point where by the age of four every child has an abnormal SNAP. By the age of 9, everyone has an absent SNAP. And what I would say is that this kind of pattern is quite consistent with other axonal neuropathies, another similar hereditary centermost neuropathies where you do see the nerve conduction studies being affected quite dramatically. What I think is important with GAN is the fact that it really mirrors what's happening clinically and correlates very nicely. We've talked before about how patients with this disease generally is symptom free in the first few months of life. They may have slightly delayed motor milestones around the age of 2, 2.5, these children present with on steadiness and a wide-based gate and a high staffing gate because they can't feel the ground beneath their feet. And this is exactly what these conduction studies are demonstrating. I think one point I will make is that what you're looking -- and I tried to get into this in the presentation, there are 3 frames you'll look out with a nerve conduction study -- amplitude, which is the height of the electrical deflection; Latency, which is how quickly the electrical stimulation takes to start; And velocity, which is the actual speed down the actual nerve. And neuro really in that earlier times were used in the demyelinating disorder multiple sclerosis, where you tended to see more effects on latency and more effects on velocity. However, for these axonal neuropathies, where you're losing axonal amplitude as the key parameter and you can see how it correlates very nice in the natural industry. But more importantly, actually, clearly stabilizes or even improves -- and you're right to the fact that a handful of patients improved from 0 and are still continuing on an upward trajectory -- is very impressive and is also reflected in what I shared in the biopsy data you saw an increasing presence of regenerating the clusters. Let me stop there. I could go on even longer, but let me stop there.

Thank you. That was very helpful. And then last one on Rett. What would you need to dose male rescue study? That's -- the timing there seems pretty important. But if you can and that…

Sure. Yes. So the important thing here is that the males are knockouts. And for an X-linked disease, this means that they have no MECP2 whatsoever. In contrast to the females where the females are mosaics and half of themselves have normal levels of P2 or the other half have mutated or absent that P2. And so in the clinical setting, the males actually are more severely affected. And the vast majority in the human situation actually die in uteri. A handful survive and lots of life through early infancy and may die in the first few months of life or sometimes to live up to the age of 2 or 3. And then so come usually to due to respiratory infection or some respiratory compromise. So it's a very, very severe form of Rett. And there aren't many of these patients, the male, knockout males that survived perhaps 200 in the world. So -- and they've also been a fairly, I guess, a forgotten group and the Rett patient community are actually very pleased that's part of our clinical development program, which, as we alluded to earlier in the call, we're starting in avals initially during the course of 2023, we'll start a pediatric girl study, and then we'll also do a pediatric boys study, a rescue study. And the Rett patient community are very happy that we're actually addressing this kind of underserved population. Specifically on your question around GoSkill, it's a really interesting question. On the one hand, there's an argument to go with a higher dose because these boys -- the high dose starting our pediatric -- our girls study, which is starting at 5 E14 total VG. And from our previous pharmacology mass oncology study, we ascertained the minimally effective dose was around 3 E14 total VG. So we're actually going in above that for the 5 E14 total VG. There's not going to go slightly higher in the males, but actually, our time is to stop the same dose. That 5 E14 total VG and the pediatric boys study that I think will be quite significant in improving that phenotype. Likely, we will go to a second dose of a 1 E15 as well.

All right. Thank you for taking our questions. Good luck. Thank you.

[Operator Instructions] Our next question comes from the line of Salveen Richter with Goldman Sachs. Please proceed with your question.

Hi thanks for taking our question and congrats on the progress. This is Tommy on for Salveen. We had a follow-up on the SNAP question. Could you help us gauge the expected consistency in SNAP across treated patients? For example, if there's characteristics at baseline that might impact the response after treatment. And on the MHRA feedback, how many patients do you think will need to be dosed with the commercial-grade material? And how does this affect the time line? Thank you.

Sure. Yeah. I mean the stats, it's an interesting question. We -- it's hard to know exactly what characteristics of the patients would predict a good response. And it's also hard to know simply because there are not that many patient numbers that have been dosed to be able to ascertain that with that degree of accuracy. What I would say is that the suggestion it makes full sense is that the earlier you treat, the more likely you are to have a response, the younger patient you treat, the more likely you are to have a response. And also, I think importantly, and this makes perfect sense is that if you -- if you can treat before the SNAP is lost or is absent, you're more likely to see an improvement in the -- in this hard endpoint and more likely to see a functional improvement as well. Having said that, very surprisingly, and we were very pleased to see that in a number of patients who actually had an absence of that and an absence of that for a period of time, we actually saw improvements in the nerve conduction SNAP amplitude that continued on lower trajectory. With regards to the MHRA, yes, we -- this is -- this was one of the questions that we talked about in detail. It was clear that they wanted us to dose more patients. And this is in line with our thesis of option 2, i.e., a handful more patients with clinical trial material. We tried in our discussion, and it was a very collegial, fruitful, long, in-depth discussion across all aspects of the program. I mean was there was over 2 hours, we talked about the preclinical data, the clinical data in depth. And there's a lot of in-depth discussion on the CMC piece as well. But they would not really be held to a specific number. They essentially said a handful of patients for a period of time for us to come back with a proposal. So what we decided to do, and our previous thoughts have always been, it's probably going to be about 3 to 5 patients for about 6 months. So our thinking was less also continue with other agencies and also got the feedback from all agencies we've come up with a proposal on the specific number of patients. But my guess, as I say, is it's going to be around about 3 to 5 patients for about 6 months.

Our next question comes from the line of Mike Ulz with Morgan Stanley. Please proceed with your question.

Just on GAN, you mentioned doing some additional validation work on the MSM32 endpoint. Can you just give us a sense of your plans there and maybe how long that validation work might take? Thanks.

Sure. Thanks. And thanks for the question, Mike. So the -- RA's quite correct, MFM32 is actually validated the pediatric neuromuscular disease in general and has been used several times previously as in supporting evidence in regulatory discussions before. Having said that, it's always best to do a formal validation as far as you can for the specific disease in question. So the plan has always been for us to formally validate the MFM32 for Giant Axonal Neuropathy. And we actually talked about this with the MHRA, and they were very open to and accepted and pleased that we've actually started this work. Now there are 3 pieces to this work. The first is to any kind of validation work. The first is a general qualitative feedback that solicited from patients and families and clinicians and PTs and OTs in a structured interview setting. And that work has been completed. And actually, we're just in the process of writing up that work, and we'll be submitting that for publication. I'm guessing about 6 to 8 weeks' time. So you'll be able to see that work in detail in the future. The second piece is to take all that information and run it through a specific -- there's a way of analyzing this qualitative semi-structured interview data, and this process is for content validation. So that that'll be the next step. And then once we've done the content validation, there's another whole additional process to the psychometric validation where we take all the natural history study data, and we take all the data from the interventional study, looked at how the MFM correlates with other aspects of other endpoints, other aspects of the disease and also with the qualitative information that we picked up in the qualitative interviews and in the content validation piece, and then we do a formal sacramental validation. That will get risk numbers of package will usually publish this work and it will end up being quite a significant report that goes in with the actual BLA filing and other regulatory interactions. In terms of timing, the process, it can take -- it can usually take quite a long time, 12 to 18 months to do it properly. Having said that, because we have this large natural history study with 50 patients worth of data, all of them have done the MFM, this truncate the time line somewhat. So it's probably going to be, I guess, a 9 to 12-month process from now.

Our next question comes from the line of Eun Yang with Jefferies. Please proceed with your question.

Thank you very much for squeezing me. I have one question and one -- another very quick question. So first question is for the Rett Syndrome data that we are expecting, you started the study in Canada probably only second quarter. So how many patient data are we going to be seeing? So that's question number one. And second question is kind of a quick question. So in the past, you consistently said that scenario number two is the most likely regulatory outcome, with that, you anticipated a potential launch by end of 2023 in the U.S. So is this still on track? Thank you.

Our next question comes from the line of Jack Allen with Baird. Please proceed with your question.

Hi. Thank you so much for taking the questions, and congratulations on all the progress. Just two quick ones. One's really quite straightforward. I guess I'll start with that. Do you have a meeting with the FDA on the books for the second half of this year as you look to gain that guidance in GAN? And then I just wanted to ask on the SNAP results on GAN. Any comments you can make with regard to the doses those patients received and a dose-dependency you saw on the SNAP results would be great. Thank you so much.

Yep. Thank you so much for the call on the first question. That does a great job of answering that. The second question is really briefly, any comments you can make around dose dependence of the SNAP result. I realize there's a limited cohort there, but I'd love to hear about what doses doses those patients received.

Sure. Yeah. It's essentially in keeping with what we saw across the other endpoints. So you'll recall there's four different dose cohorts in the study. The initial dose, 3.5E13 is more of a safety dose that generally didn't show much efficacy. It was detectable, even though some families said that there's some qualitative improvements. Cohort two was a 1.2E14. Cohort three, 1.8E14. And cohort four was a 3.5E14 total VG. And those three upper doses are clustered quite close together. I think if we designed the study now, we would actually not have full dose cohorts and we would have -- or probably two dose cohorts. We'd have a bigger range between the two. And what I would say is that across all the endpoints, the data from those test scores two, three, and four were generally pretty comparable. And that was also true for the SNAP. We saw nothing for the very low dose cohort, but we saw improvements in the higher dose cohorts. It is a suggestion that you're teasing out a bit more of a dose response over the SNAP. There's a suggestion that the highest dose is getting a little bit more in the way of improvements on the amplitude than cohorts two or three. But in general, cohorts two, three, and four all results in good improvements, both in SNAP and in the presence of regions with no clusters.

Our next question comes from the line of Yun Zhong with BTIG. Please proceed with your question.

Hi. Thank you very much for taking the question. So I wanted to confirm that the feedback that you received from MHRA does not change your confidence that you will be able to file based on available data when you talk to the EMA and also want to confirm that by year end when you provide feedback, would that feedback include EMA feedback as well? Because EMA sometimes can be less flexible in terms of clinical endpoint versus surrogate endpoint that you talked on the call. Thank you very much.

Yes, it did. Thank you very much.

Our next question comes from the line of Sami Corwin with William Blair. Please proceed with your question.

Hi, guys. Congrats on the progress, and thanks for taking my question. Do you think these additional patients you're going to dose -- the additional GAN patients you're going to dose will also satisfy the FDA if they wanted additional patients just as clinical material? And then can you just broadly speak about how dosing in the Rett trial is going?

Yeah. Do you think these additional GAN patients you plan on dosing in September once the clinical trial material -- or sorry, once the commercial materials release, do you think that quantity of patients and duration of follow-up will also satisfy the FDA if they wanted additional patients dosed?

Not really to add, but just to emphasize the fact that we'll look at all the regulatory agency feedback in totality and conduct the study on an ongoing basis in order to meet all the needs. And my guess is, yes, it'll be three to five patients, six months' worth of data. And that should meet the needs of the MHRA, the EMA, the FDA, and any other agency we're in discussions with.

And our last question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Good morning. This is Rick on for Kristen. Thank you for taking our question. Just a question on the individual patient SNAP data. It looks like patient A appeared to show little change from baseline. Could you talk about how you're thinking about the specific case and what it might be telling us potentially about baseline characteristics or time of dosing? Thanks.

I hear what you're saying. I mean, patient A on its own is actually what we were hoping to see. We would have been very pleased if all patients stabilized because this is a child. If you look at that based on what the dose there, that scores about six microvolts and that is well below the normal limit and -- from the actual history data is on a very rapid downward trajectory. So that's -- that would have disappeared probably six months after that time of dosing if they hadn't been dosed. And we saw stabilization. And that's what we're hoping to see. The only reason it doesn't look so good is because the other patients are actually doing so much better. So, yeah, we were happy with that. We were very happy with our patients' performance, especially in comparison to the natural history, but simply because most of the other patients did significantly better. And once again, just to emphasize the fact that to go from a zero SNAP, if you look at patient B and you look at patient D, those patients had zero SNAP amplitude for well over a year. And for them to improve and for patient B in particular to be close to normal of the three and a half year time period, and still on an upward trajectory is really very significant and you would not expect to see this in a neurodegenerative disease. So it's very powerful data.

And we have reached the end of the question-and-answer session. I'll now turn the call back over to Mr. RA Session for closing remarks.

And this concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.