10-K

pasg-20201231x10k.htm

10-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2020

For the transition period from to

Commission File Number 001-39231

PASSAGE BIO, INC.

(Exact Name of Registrant as Specified in Its Charter)

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

Two Commerce Square

(Address of principal executive offices) (Zip Code)

(267) 866-0311

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchange on which registered

Common stock PASG The Nasdaq Stock Market LLC (Nasdaq Global Market)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the common equity held by non-affiliates of the Registrant on June 30, 2020 (the last business day of the Registrant’s second fiscal quarter), based upon the closing price of $27.33 of the Registrant’s common stock as reported on The Nasdaq Global Market, was approximately $771.5 million.

The number of shares of the registrant’s common stock outstanding as of March 1, 2021, was 53,831,466.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Definitive Proxy Statement (“Proxy Statement”) relating to the 2021 Annual Meeting of Stockholders will be filed with the Commission within 120 days after the end of the Registrant’s 2020 fiscal year and is incorporated by reference into Part III of this Report.

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Passage Bio, Inc.

ANNUAL REPORT ON FORM 10-K

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Page

PART I 5

ITEM 1. Business 5

ITEM 1A. Risk Factors 68

ITEM 1B. Unresolved Staff Comments 118

ITEM 2. Properties 119

ITEM 3. Legal Proceedings 120

ITEM 4. Mine Safety Disclosures 121

PART II 122

ITEM 6. Selected Financial Data 123

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 135

ITEM 8. Financial Statements and Supplementary Data 136

ITEM 9A. Controls and Procedures 157

ITEM 9B. Other Information 158

PART III 159

ITEM 11. Executive Compensation 160

ITEM 14. Principal Accounting Fees and Services 163

PART IV 164

ITEM 15. Exhibits and Financial Statement Schedules 164

Signatures 169

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical facts contained in this Annual Report are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. All statements other than statements of historical fact contained in this Annual Report, including without limitation statements regarding our plans to develop and commercialize our product candidates, the timing of our ongoing or planned clinical trials, the timing of and our ability to obtain and maintain regulatory approvals, the clinical utility of our product candidates, our commercialization, marketing and manufacturing capabilities and strategy, our expectations about the willingness of healthcare professionals to use our product candidates, the sufficiency of our cash and cash equivalents, the expected impact of the COVID-19 pandemic on our operations, and the plans and objectives of management for future operations and capital expenditures are forward-looking statements.

The forward-looking statements in this Annual Report are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Annual Report and are subject to a number of known and unknown risks, uncertainties and assumptions, including those described under the sections in this Annual Report entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Annual Report.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. We intend the forward-looking statements contained in this Annual Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Trademarks and Tradenames

“PASSAGE BIO” is a registered trademark, and the PASSAGE BIO mark, the Passage Bio logo and all product names are our common law trademarks. All other service marks, trademarks and tradenames appearing in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and tradenames referred to in this prospectus appear without the ® and TM symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor to these trademarks and tradenames.

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Summary of Risk Factors

Our business is subject to a number of risks and uncertainties, including those immediately following this summary. Some of these risks are:

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PART I

Item 1. Business

Overview

We are a genetic medicines company focused on developing transformative therapies for rare, monogenic central nervous system, or CNS, disorders with limited or no approved treatment options. Our vision is to finally fulfill the promise of gene therapy by developing groundbreaking therapies that transform the lives of patients with rare monogenic CNS diseases. The field of genetic medicine is rapidly expanding and we believe we have a differentiated approach to developing treatments for rare, monogenic CNS disorders that enables us to select and advance product candidates with a higher probability of technical and regulatory success. We have entered into a strategic research collaboration with the Trustees of the University of Pennsylvania’s, or Penn’s Gene Therapy Program, or GTP, headed by Dr. James Wilson, a leader in the genetic medicines field. We also leverage our close working relationship with Penn’s Orphan Disease Center, or ODC, to develop historical and prospective comparable natural history patient profiles for comparison to participants in interventional trials. Through this collaboration we have assembled a deep portfolio of genetic medicine product candidates, including our three lead product candidates, all of which we retain global rights to: PBGM01 for the treatment of GM1 gangliosidosis, or GM1, PBFT02 for the treatment of frontotemporal dementia, or FTD, and PBKR03 for the treatment of Krabbe disease.We currently have active INDs for our three lead programs in the United States, and clinical trial authorizations, or CTAs, for our Imagine-1 Trial for PBGM01 from the United Kingdom’s Medicines Healthcare Products Regulatory Agency, or MHRA, and Health Canada. We expect to initiate patient enrollment for Phase 1/2 trials for GM1 in the first quarter of 2021, for FTD in the first half of 2021 and for Krabbe disease in the first half of 2021. We will also continue to explore entering into new collaborations to build our pipeline.

Our research collaboration with GTP provides us with access to one of the premier research institutions in the world for the discovery and preclinical development of genetic medicine product candidates and exclusive rights to certain rare, monogenic CNS disorders. As part of this collaboration, we have exclusive rights to all discovery work and IND-enabling research for up to 17 rare, monogenic CNS indications that we select. In addition to our three lead product candidates, we have four ongoing research programs and an option to license ten additional programs from GTP. Further, we have exclusive rights, subject to certain limitations, to technologies resulting from the discovery program for Passage Bio products developed with GTP, such as novel capsids, toxicity reduction technologies and delivery and formulation. We have global commercial rights to all of our product candidates and believe that our approach to developing therapies for rare, life-threatening diseases that are currently underserved presents an opportunity to efficiently advance our product candidates through clinical development, regulatory approval and ultimately to commercialization.

We founded Passage Bio with the intent to build a differentiated CNS genetic medicines company delivering transformative therapies to patients by combining our team’s experience in rare and neurological disease development, manufacturing and commercialization with the pioneering research expertise of GTP in gene therapy. We are purposefully focusing on rare, monogenic CNS disorders for which we believe our genetic medicine approach provides distinct technical advantages based on decades of research by GTP. GTP conducts rigorous preclinical studies to identify promising product candidates. Our collaboration provides us with access to cutting edge capabilities and innovation in the field of genetic medicine research, including in capsid engineering and next-generation capsid libraries, vector engineering, transgene design and gene therapy modalities, animal disease models and related studies for lead-optimization of product candidates. Further, we believe our team’s deep clinical development experience in rare and neurological diseases will enable well planned clinical trials with the potential for efficient advancement to regulatory approval. In addition, we are engaging with key opinion leaders, practitioners and patient advocacy groups in the field of rare, monogenic CNS disorders that provide strategic input and help inform our clinical development activities. We believe that our ability to execute on the above tenets provides us with product candidates that have an improved profile for clinical development and an enhanced probability of success.

We are focused on developing and commercializing disease-modifying therapies that can have a transformative impact on patients’ lives. Utilizing our rigorous selection process, we have assembled a deep portfolio of product

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candidates for rare, monogenic CNS disorders. Our first product candidate, PBGM01, utilizes a next-generation AAVhu68 capsid to deliver to the brain and peripheral tissues a functional GLB1 gene encoding lysosomal beta-galactosidase, or β-gal, for GM1. Our second product candidate, PBFT02, utilizes an AAV1 capsid to deliver to the brain a functional GRN gene encoding progranulin, or PGRN, for FTD caused by progranulin deficiency, or FTD-GRN. Our third product candidate, PBKR03, utilizes a next-generation AAVhu68 capsid to deliver to the brain and peripheral tissues a functional gene encoding the hydrolytic enzyme galactosylceramidase, or GALC, for Krabbe disease. There are currently no approved disease-modifying therapies for these diseases. We believe our lead product candidates have the potential to provide patients with significantly improved outcomes, given our chosen route of intra cisterna magna, or ICM, administration, which is an injection at the craniocervical junction, our target choice of secreted proteins that leverage the cross-correction mechanism, thereby reducing transduction requirements and our capsid and transgene selection process which allows us to choose vectors that are fit-for-purpose for specific indications.

We also have four programs in the research stage: PBML04 for metachromatic leukodystrophy, or MLD, PBAL05 for amyotrophic lateral sclerosis, or ALS, PBCM06 for Charcot-Marie-Tooth Type 2A, or CMT2A, and one program for an undisclosed target. PBML04 is targeting MLD patients who have mutations in the ARSA gene, PBAL05 is targeting ALS patients who have a gain-of-function mutation in the C9orf72 gene, PBCM06 is targeting CMT2A patients who have a mutation in the MFN2 gene and our undisclosed program is targeting an adult CNS indication. We also have an option to license ten additional programs from Penn in rare, monogenic CNS indications through 2025.

We are led by pioneers and experts with decades of collective experience in genetic medicines, rare disease drug development, manufacturing and commercialization. Our scientific founders, Dr. Stephen Squinto, Dr. James Wilson and Dr. Tadataka Yamada, are world leaders in research and development in the fields of rare disease and genetic medicine. Dr. Wilson’s and Dr. Yamada’s continuing relationship with our company and involvement in both academic research and clinical drug development allows us to gain early insight into emerging technologies that informs our business strategy. We have assembled a team whose members have extensive experience in successfully developing, manufacturing and commercializing rare disease and genetic medicine products at companies such as Allos Therapeutics, Biogen, GlaxoSmithKline, Janssen Pharmaceuticals, Lycera, Merck & Co., Momenta Pharmaceuticals, NPS Pharmaceuticals, Pharmasset, Ultragenyx Pharmaceutical and ViroPharma.

Our pipeline

We have assembled a deep portfolio of genetic medicine product candidates for rare, monogenic CNS disorders characterized by high unmet medical needs. We intend to further expand our portfolio with genetic medicine product candidates for other rare, monogenic CNS disorders as well as other treatment approaches as technology advances in the field. Our development programs consist of:

1 10 additional new pipeline license options

2 Program includes ongoing natural history study of infantile and juvenile GM1 gangliosidosis patients

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PBGM01 for the treatment of GM1

We are currently developing PBGM01, which utilizes a proprietary, next-generation AAVhu68 capsid to deliver to the brain and peripheral tissues a functional GLB1 gene encoding β-gal for infantile GM1. Infantile GM1 is the most common and severe form of GM1, in which patients have mutations in the GLB1 gene that produce little or no residual β-gal enzyme activity. β-gal is an enzyme that catalyzes the first step in the natural degradation of GM1 ganglioside. Reduced β-gal activity results in the accumulation of toxic levels of GM1 ganglioside in neurons throughout the brain, causing rapidly progressive neurodegeneration, with a life expectancy of two to four years. Currently, there are no disease-modifying therapies approved for the treatment of GM1. Early onset infantile GM1 is characterized by onset in the first 6 months of life, while late onset infantile GM1 is characterized by onset between 6 and 24 months. We believe PBGM01 could provide patients with significantly improved outcomes. In preclinical models, we have observed meaningful transduction of both the CNS and critical peripheral organs for GM1 patients using our ICM method of administration in combination with our next-generation AAVhu68 capsid, which involves an injection at the craniocervical junction.

In December 2020, the U.S. Food and Drug Administration, or FDA, cleared our IND for PBGM01, which allows us to proceed with our clinical trial. We expect to initiate patient enrollment in our Imagine-1 Trial, an international multi-center, open-label, single-arm Phase 1/2 clinical trial of PBGM01 in patients with a diagnosis of early and late infantile GM1, in the first quarter of 2021. In December 2020, we received a CTA for our Imagine-1 Trial for PBGM01 from UK MHRA. In January 2021, we received a CTA for our Imagine-1 Trial for PCGM01 from Health Canada. We expect to report initial 30-day safety and biomarker data from the initial cohort mid-year 2021.

PBFT02 for the treatment of FTD-GRN

We are currently developing PBFT02, which utilizes an AAV1 capsid to deliver to the brain a functional granulin, or GRN, gene encoding progranulin, or PGRN, for the treatment of FTD-GRN. FTD-GRN is an inheritable form of FTD in which patients have mutations in the GRN gene, causing a deficiency in PGRN. PGRN is a complex and highly conserved protein thought to have multiple roles in cell biology, development and inflammation. Emerging evidence suggests that PGRN’s pathogenic contribution to FTD and other neurodegenerative disorders relates to a critical role in lysosomal function. Currently, there are no disease-modifying therapies approved for the treatment of FTD-GRN. We believe PBFT02 may provide patients with significantly improved outcomes. In a non-human primate, or NHP, model, we observed superior transduction results of the CNS using our ICM method of administration and an AAV1 capsid compared to other AAV capsids. In January 2021, we received FDA clearance of our IND for PBFT02. We plan to submit CTAs to the United Kingdom, Italy, Brazil and Canada. We expect to initiate patient enrollment for a Phase 1/2 trial in the first half of 2021 and anticipate clinical data to be available in late 2021 or early 2022.

PBKR03 for the treatment of Krabbe disease

We are currently developing PBKR03, which utilizes a proprietary, next-generation AAVhu68 capsid to deliver to the brain and peripheral tissues a functional GALC gene encoding the hydrolytic enzyme galactosylceramidase for Krabbe disease. Krabbe disease is an autosomal recessive lysosomal storage disease caused by mutations in the GALC gene, which provides instructions for making an enzyme called galactosylceramidase, which breaks down certain fats, including galactosylceramide and psychosine. This results in the accumulation of psychosine, resulting in widespread death of myelin-producing cells in the CNS and in the peripheral nervous system, or PNS. Without myelin, nerves in the brain and other parts of the body cannot transmit signals properly, leading to the signs and symptoms of Krabbe disease. We believe PBKR03 may provide patients with significantly improved outcomes. In preclinical models, we have observed meaningful transduction of both the CNS and other critical peripheral organs for Krabbe disease patients using our ICM method of administration in combination with our next-generation AAVhu68 capsid. In February 2021, we received clearance from the FDA on our IND for PBKR03. We plan to submit CTAs for PBKR03 in Canada, UK, Brazil, Netherlands, and Israel. We expect to initiate patient enrollment for a Phase 1/2 trial in the first half of 2021 and anticipate clinical data to be available in late 2021 or early 2022.

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Research Programs

We also have four programs in the research stage under our license agreement with Penn: PBML04 for MLD, PBAL05 for ALS, PBCM06 for CMT2A and an undisclosed program to treat an adult CNS indication. PBML04 is targeting patients with MLD who have mutations in the ARSA gene, PBAL05 is targeting patients with ALS who have a gain-of-function mutation in the C9orf72 gene and PBCM06 is targeting patients with CMT2A who have a mutation in the MFN2 gene. Beyond this portfolio, through our research collaboration with GTP, we also have the option to license programs for ten additional new indications in rare, monogenic CNS along with rights and licenses to new gene therapy technologies developed by Penn, such as novel capsids, toxicity reduction technologies and delivery and formulation.

Our Strategy

We are a genetic medicines company focused on developing transformative therapies for rare, monogenic CNS disorders with limited or no approved treatment options. Our vision is to finally fulfill the promise of gene therapy by developing groundbreaking therapies that transform the lives of patients with rare monogenic CNS diseases.

To achieve our vision, we have assembled a world-class team whose members have decades of collective experience in genetic medicines and rare disease drug development and commercialization. We leverage this experience, along with the decades of experience of our scientific founders, Dr. Wilson and Dr. Yamada, as well as the transformative potential of genetic medicine technology to develop treatments that improve outcomes for patients with serious, life-threatening, rare diseases. Patients are considered every step of the way, in every decision we make.

Key elements of our strategy include:

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Genetic Medicine Background

Each person’s genetic material, or genome, consists of deoxyribonucleic acid, or DNA, in sequences of genetic code called genes. The DNA in the human genome contains approximately three billion nucleotide base pairs, and small changes, or mutations, routinely occur in the base pairs. A mutation in a single gene can alter the amount or activity of the protein expressed by the gene, causing deformities and disease. Currently, there are estimated to be over 10,000 diseases caused by a genetic abnormality in a single gene. These are also known as monogenic diseases. Based on research commissioned by us, we believe there are at least 790 rare monogenic CNS diseases, with few currently approved disease modifying treatments for any rare monogenic CNS diseases.

The development of molecular therapeutics to modulate human gene expression and correct disease-causing genetic defects had its advent several decades ago, and with advances in science and a deeper understanding of human genetics it has expanded to include a broader range of genetic medicines with the potential to modulate gene expression through additional molecular mechanisms.

These transformative genetic medicines include gene therapy (delivery of an external gene to replace a defective gene), gene silencing (delivery of a DNA or ribonucleic acid, or RNA, based therapeutic that modulates the transcription or translation of an injurious gene product), gene editing (delivery of a DNA or RNA-based therapeutic that corrects the expression of targeted genes) and combinations of these therapeutic modalities. We believe that this expanded molecular biological tool box will provide new therapeutics with the potential to deliver highly potent and safe interventions across a diverse set of genetic diseases, offering several advantages, including:

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Genetic medicines can be designed to mitigate challenges faced by other approaches in the development of therapeutics for the CNS. Rare, monogenic CNS disorders are among the most devastating in their impact on patients and their families. These disorders are generally life-threatening to patients. There is a significant need for genetic medicines that can target these genes because the brain is susceptible to mutations in single genes. Due to a historical preference in the drug industry to develop drugs for broader CNS indications, many of these rare CNS disorders currently have no approved therapies. We are focused on rare, monogenic CNS disorders because they offer a compelling opportunity for the effective application of genetic medicines.

Our Approach

The field of genetic medicine is rapidly expanding and we believe we have developed a differentiated approach to developing treatments for rare, monogenic CNS disorders that allows us to select and advance product candidates with a higher probability of technical and regulatory success. Our gene therapy product candidates use an AAV, a small, non-pathogenic virus that is genetically engineered to function as a delivery vehicle, or vector. The AAV is administered to a patient to introduce a healthy copy of a mutated gene to the cells in a process referred to as transduction. The components of an AAV gene therapy vector include the therapeutic gene that makes up the DNA payload, or the transgene, the outer viral shell that encloses the DNA payload, or the capsid, and any promotors added to the vector to boost expression of the transgene. The AAV is often described by the serotype, or strain, of the vector. The core tenets of our approach include a rigorous process for selecting product candidates, mitigation of early development risk through relationships with leading researchers and academic institutions, and mitigation of clinical development risk through deep relationships with patient advocacy groups, key opinion leaders and practitioners. Together, these relationships allow us to directly benefit from decades of collective experience, the latest technologies and contemporary perspectives from patients and their experiences.

Rigorous Process for Selecting Product Candidates

In selecting our product candidates, we focus initially on optimizing transduction and expression of transgenes in the indication-specific target tissues. This involves prioritizing the following principles: selection of the route of administration to maximize transgene biodistribution; selection of capsid, transgene and promoter to optimize efficiency of transduction and expression in the target tissue; leveraging biological mechanisms such as cross-correction to maximize availability of transgene product to target cells; and the effective use of biomarkers to assess treatment effects on transduction, transgene expression and on disease pathophysiology.

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Mitigation of Early Development Risk of Programs Prior to IND submission

We have a strategic research collaboration with GTP, which is led by our co-founder and Chief Scientific Advisor, Dr. Wilson, and which we believe positions us at the forefront of gene therapy research. This collaboration provides us with access to differentiated discovery technology and expertise that informs the basis of our product candidate selection and subsequent development.

Our strategic research collaboration with GTP provides us with access through 2025 to one of the premier gene therapy research institutes in the world for the discovery and preclinical development of gene therapy product candidates and exclusive rights to certain rare, monogenic CNS disorders, including next-generation AAV capsid technology and vector engineering, and state-of-the art preclinical animal studies, including NHP models. GTP currently employs approximately 300 staff with cutting edge expertise and capabilities in gene therapy research and preclinical development.

Our collaboration with GTP allows us to choose programs that have been or will be validated through extensive testing in preclinical disease models, and, once selected, to collaborate with GTP on further preclinical optimization of our product candidate, such as vector choice, transgene construct and route of administration. We believe this collaboration improves our probability of technical and regulatory success in developing product candidates that provide transformative clinical benefits.

Once we select a particular rare, monogenic CNS indication for further development, GTP, with our close involvement and oversight, embarks on a rational discovery and development program to design product candidates that may provide improved clinical benefit. We usually evaluate transduction efficiency and biodistribution using multiple different capsids in NHPs to select the capsid best suited for the targeted indication. GTP also works to optimize the delivery method used for each product candidate by balancing delivery, efficacy, safety, host immunity and ease of administration. We believe the translational preclinical characterization provided by GTP, including the use of NHP models for vector screening and toxicology, reduces the early-stage development risk of our product candidates.

Pursuant to our discovery collaboration, GTP will also notify us of any new technologies it discovers, develops or engineers as part of its discovery program through 2025. We then have the option to acquire the right to use such new technologies for our product candidates for our selected indications.

Mitigation of Clinical Development Risk through Our Relationship with Penn’s ODC

We also have a strong relationship with Penn’s ODC. As part of our research collaboration with GTP, we have access to Penn’s ODC’s insights and capabilities in the study of rare diseases. We leverage our close working relationship with Penn’s ODC to develop historical and prospective external data for each disease for use in building comparable patient profiles of participants in interventional trials. In addition, we believe Penn’s ODC’s close ties to leading clinical centers for rare, monogenic CNS disorders will improve our ability to identify potential patients for trial enrollment, and enhance patient retention and data quality. Penn’s ODC is currently performing a natural history study for GM1 funded by us.

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Our Product Candidates

GM1—PBGM01

Overview of GM1

GM1 is a rare and often life-threatening monogenic recessive lysosomal storage disease that results in progressive damage to both the CNS and the peripheral tissues. The infantile form of the disease is characterized by onset in the first two years of life with symptoms including hypotonia (reduced muscle tone), progressive CNS dysfunction leading to deafness, blindness, enlarged liver and spleen, rigidity and progressive skeletal dysplasia that leads to restrictive lung disease and aspiration pneumonia. Early onset infantile GM1, also referred to as Type I, is characterized by onset in the first six months of life, while late onset infantile GM1, also referred to as Type IIa is characterized by onset between six and 24 months. The disease rapidly progresses, with a life expectancy of less than two years for early infantile GM1 and five to ten years for late infantile GM1.

GM1 is caused by recessive mutations in the GLB1 gene, which encodes lysosomal acid beta-galactosidase, or β-gal, an enzyme that catalyzes the first step in the natural degradation of GM1 ganglioside. Reduced β-gal activity results in the accumulation of toxic levels of GM1 ganglioside in neurons throughout the brain, causing rapidly progressing neurodegeneration. GM1 manifests as a continuum of clinical severity, ranging from infants with earlier onset and more severe and rapidly progressive disease to those with later juvenile or adult onset, slower progression and less severe manifestations.

The global incidence of GM1 has been estimated to be 0.5 to 1 in 100,000 live births, with infantile GM1 representing approximately 62.5% of such cases. No states include GM1 in mandatory infant screening. We engaged a third-party data-analytics firm to conduct an analysis of a variety of de-identified electronic medical records. Based on this analysis, we estimate the incidence of infantile GM1 to be approximately 1.4 in 100,000 live births. Currently, there are no approved disease-modifying therapies available. Supportive treatment options include the use of feeding tubes or ventilators for infants with GM1.

Program selection

We chose GM1 as one of our lead clinical programs because it met our criteria for rare, monogenic CNS disorders in which we believe we can develop product candidates with a higher probability of technical and regulatory success and have a substantial impact on the lives of severely underserved patients. GM1 offers potential cross-correction, biomarker data and preclinical validation that are supportive of advancing GM1 into the clinic.

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Product Candidate Development Strategy

We have chosen the earliest and most severe form of GM1 for clinical development for several reasons. Within GM1, infantile GM1 represents the greatest medical need, as affected infants often do not survive two years, and thus are in immediate need of an effective therapy. We expect treatment-related efficacy to be measurable sooner after treatment in this more rapidly progressing form of GM1. Children with onset forms of GM1 later than infantile are caused by less severe reductions of β-gal enzyme activity, generally demonstrate slower progression and more variable clinical courses, likely requiring larger and longer clinical trials and a broader control group. If our initial clinical trials in infantile GM1 are successful, we intend to explore expansion of the indication with trials in later onset forms of GM1.

Our Product Candidate

We are developing PBGM01 to treat infantile GM1, with a single dose of PBGM01 by ICM injection. PBGM01 utilizes a next-generation AAVhu68 viral vector to deliver modified DNA encoding the β-gal enzyme to a patient’s cells. The goal of this vector and delivery approach is to increase levels of the β-gal enzyme in both the CNS and the peripheral tissues. We selected the AAVhu68 capsid and ICM route due to the superior transduction observed in cells of the CNS and peripheral organs, which are both affected in GM1 disease patients. Based on prior capsid comparison studies, we chose the AAVhu68 vector because it has the potential to provide corrective β-gal enzyme to both the CNS and peripheral tissues, which we believe gives us the potential to treat both the CNS pathologies and the peripheral manifestations observed in GM1 disease.

We believe gene replacement with PBGM01 and consequent wide brain distribution and uptake of the β-gal enzyme has the potential to greatly reduce the accumulation of GM1 gangliosides, reversing neuronal toxicity, thereby restoring developmental potential and improving the quality of life for treated patients. We will evaluate this clinically by assessing prevention of further developmental regression and restoration of developmental trajectories, as measured by developmental milestones using accepted clinical scales, observer reported outcomes and video recordings.

Preclinical studies

Proof of concept GLB1 Knockout Mouse Study

Preclinical studies were conducted using a GLB1 knockout mouse model of GM1 (mice that carry homozygous mutations in the GLB1 gene, or GLB1—/—mice). The studies compared GLB1—/—mice treated with PBGM01, GLB1—/—mice treated with vehicle (phosphate-buffered saline, or PBS) and disease-free mice that are heterozygous GLB1 mutation carriers, or GLB1+/—mice, treated with vehicle. In this study, all mice were treated at one month of age and observed until four months of age, which is when GM1 mice typically develop marked gait abnormalities associated with brain GM1 ganglioside levels similar to those of infantile GM1 patients with advanced disease. All mice were treated with an intracerebroventricular, or ICV, injection of either PBGM01 (denoted in the following graphics as AAV) or vehicle. Ninety days after treatment, all animals were euthanized and tissues collected, referred to as necropsy, for histological and biochemical analysis. Serum β-gal activity was measured at various time points following treatment (days 0, 10, 28, 60 and 90). β-gal activity in the brain, CSF and peripheral organs were evaluated at the time of necropsy.

The figure below shows that PBGM01-treated GLB1—/—mice had substantially higher serum β-gal activity following treatment than vehicle-treated GLB1—/—mice and similar β-gal activity to vehicle treated heterozygous control mice. Elevated serum β-gal activity as measured in nanomolar per milliliter per hour, or nmol/ml/h, was achieved shortly after treatment for all PBGM01-treated mice and persisted throughout the study for all but two PBGM01-treated mice, both of which exhibited antibodies against human β-gal.

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Serum β-gal activity

The following figure shows β-gal activity in the brain as measured in nanomolar per milligram per hour, or nmol/mg/h, and CSF following necropsy. β-gal activity in the PBGM01-treated mice exceeded the vehicle-treated GLB1—/—mice in both the brain and the CSF.

Treatment with PBGM01 increased β-gal activity in the brain and CSF in a knockout mouse model

*p<0.05, **p<0.01, NS=not significant.

Statistical significance is important and when used herein is denoted by p-values. The p-value is the probability that the reported result was achieved purely by chance (for example, a p-value < 0.001 means that there is a less than 0.1% chance that the observed change was purely due to chance). Generally, a p-value less than 0.05 is considered to be statistically significant.

The following figure shows β-gal activity in the lungs, liver, heart and spleen following necropsy. In each organ, β-gal activity in the PBGM01-treated GLB1—/—mice exceeded activity levels in vehicle-treated GLB1—/—

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mice. This data supports the potential of PBGM01 to provide corrective β-gal enzyme activity to peripheral organs and suggests that treatment with PBGM01 could address both the CNS and peripheral manifestations observed in GM1 patients.

Treatment with PBGM01 Increased β-gal Activity in Peripheral Organs in A Knockout Mouse Model

**p<0.01, NS=not significant.

We also assessed correction of brain abnormalities using biochemical and histological assays following necropsy. Lysosomal enzymes are frequently upregulated in lysosomal storage diseases, an observation that has been confirmed in GM1 patients. Therefore, we measured the activity of the lysosomal enzyme HEX in brain lysates. The figure below shows that the activity of HEX in PBGM01-treated GLB1—/—mice was normalized as compared to GLB1+/—control mice, while vehicle-treated GLB1—/—mice exhibited elevated total HEX activity.

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Treatment with PBGM01 normalized hexosaminidase activity in brain in a knockout mouse model

**p<0.01, NS=not significant.

Histological analysis

In addition to the knockout mouse model, we also performed a histological analysis comparing PBGM01-treated GLB1—/—mice to both vehicle-treated GLB1—/—mice and GLB1+/—control mice following necropsy. We evaluated lysosomal storage lesions by staining brain sections with filipin, a fluorescent molecule that binds GM1 ganglioside, as well as immunostaining for lysosomal-associated membrane protein 1. Filipin staining revealed marked GM1 ganglioside accumulation in neurons of the cortex, hippocampus and thalamus of the vehicle-treated GLB1—/—mice, which was normalized in the GLB1—/—mice treated with PBGM01. Immunohistochemistry demonstrated increased lysosomal membrane staining in the cortex and thalamus of vehicle-treated GLB1—/—mice, which was reduced in PBGM01-treated GLB1—/–mice similar to GLB1+/—control mice.

Evaluation of Treatment-Effects on Neurological Function

In order to evaluate neurological function in PBGM01-treated GLB1—/—mice, gait analysis was performed at four months of age (three months after PBGM01 or vehicle administration) over two consecutive days using the CatWalk XT gait analysis system, a commonly used assessment of motor performance in mice. Average walking speed and the length of the hind paw print were quantified for each animal across at least three assessments on the second day of testing. Slower speed and elongated paw prints are indicative of impaired motor performance. As shown in the figure below, walking speed and paw print length improved significantly in PBGM01-treated GLB1—/—mice compared to vehicle-treated GLB1—/—mice, and were similar to the GLB1+/—control mice.

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Treatment with PBGM01 Improved Gait Assessment in A Knockout Mouse Model

*p<0.05, **p<0.01, NS=not significant.

Dose Ranging Pharmacology Study

A pharmacology study was conducted to evaluate the minimum effective dose, or MED, and β-gal expression levels in a GLB1 knockout mouse model of GM1 following ICV administration of PBGM01. In this study, GLB1—/—mice were ICV-administered with PBGM01 at four separate dose levels. Other GLB1—/—mice and heterozygous GLB1 mice were ICV-administered with vehicle. The mice were separated into two groups, with one group necropsied at day 150, or the Day 150 Group, and one group necropsied at day 300, or the Day 300 Group. There were twelve mice in each cohort in each group.

In this study, ICV administration of PBGM01 resulted in stable, dose-dependent increases in transgene product expression in the brain and peripheral organs, resolution of brain lysosomal storage lesions, improvements in neurological phenotype and increased survival of GLB1—/—mice. The lowest dose evaluated is considered the MED based on statistically significant improvements in survival, neurological exam scores and brain storage lesions at that dose.

Survival data

The figure below shows survival data of each cohort in the Day 300 Group of the study. All 12 vehicle-treated GLB1—/—mice were euthanized according to the study defined euthanasia criteria prior to the scheduled study endpoint due to disease progression with neurological signs, characterized by ataxia, tremors and limb weakness. The median survival of this group was 268 days (185-283 days). In the lowest dose cohort, five of twelve mice were euthanized due to disease progression. In the second lowest dose cohort, one of twelve mice was euthanized due to disease progression. All mice in the two highest dose cohorts survived to the study endpoint.

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Survival Curves Following Administration of PBGM01 or vehicle

Neurological examinations

A standardized neurological examination was performed in a blinded fashion every 60 days through day 240, and an average total severity score was obtained. Data for the Day 150 Group and Day 300 Group were combined by treatment and genotype. The figure below shows average total severity score for each cohort as of each assessment period. The results of vehicle-treated GLB1—/—mice exhibited progressively higher total severity scores indicative of progressive neurological signs beginning at the day 120 assessment. At the lowest dose of PBGM01, a progressive increase in the total severity score was also observed at the day 120 assessment, although the total severity score was significantly lower than that of the vehicle-treated GLB1—/—mice at the same assessment point. At the second lowest PBGM01 dose, minimal abnormalities were detectable in seven of twelve mice at the day 240 assessment. At the two highest doses of PBGM01, neurological abnormalities were not apparent, and total severity scores for these groups were similar to those of the vehicle-treated GLB1+/—controls at each assessment point.

Neurological Examinations Through Day 240

Histological analysis

A histological analysis was also performed comparing brain sections of PBGM01-treated GLB1—/—mice, vehicle treated GLB1—/—mice and vehicle treated GLB1+/—control mice at baseline, day 150 and day 300. Brain sections were stained for the lysosomal membrane protein LAMP1, and cortical cells positive for LAMP1

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(i.e., cells exhibiting lysosomal distention) were quantified in scanned sections using an automated program. For animals that did not survive to the scheduled day 300 necropsy due to disease progression (all animals survived to day 150), brains were collected at the time of euthanasia, and data are presented as part of the day 300 cohort. The results of this analysis are shown in the figure below. Untreated GLB1—/—baseline mice necropsied on day 1 exhibited a higher proportion of LAMP1-positive cells in the brain compared to that of untreated GLB1+/—baseline controls. At both day 150 and day 300, PBGM01-treated mice exhibited a dose-dependent reduction in the proportion of LAMP1-positive cells compared to vehicle-treated necropsied GLB1—/—controls. At the two highest doses of PBGM01, the proportion of LAMP1-positive cells were reduced to levels similar to those of vehicle-treated GLB1+/—controls at day 150 and day 300.

β-gal activity

β-gal activity was measured in serum on the day of dosing and every 60 days thereafter until day 240. At necropsy, β-gal activity was measured in the brain and peripheral organs (heart, liver, spleen, lung and kidney). As shown in the figure below, average β-gal activity in serum in GLB1—/—mice in the Day 300 Group administered the highest dose of PBGM01 was approximately 10-fold greater than that of vehicle-treated GLB1+/—controls. At the second highest dose of PBGM01, serum β-gal activity in GLB1—/—mice was similar to that of vehicle-treated GLB1+/—controls. Serum β-gal activity in GLB1—/—mice for all other PBGM01 doses was similar to that of vehicle-treated GLB1—/—controls.

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β-Galactosidase Activity in Serum of Glb1—/—Mice Treated with PBGM01 or vehicle (day 240)

As shown in the figure below, β-gal activity was detectable in the CSF of all mice evaluated. GLB1—/—mice that were administered the two highest doses of PBGM01 displayed average CSF β-gal activity levels exceeding that of vehicle-treated GLB1+/—controls. CSF was not collected from vehicle-treated GLB1—/—mice because none survived to day 300. The shaded gray area in the figure below reflects the range of β-gal activity in CSF from GLB1—/—mice based on data from ten vehicle-treated animals from a prior study. β-gal activity in CSF was generally dose-dependent, although β-gal activity appeared to be similar in the two lowest dose groups.

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β-Galactosidase Activity in CSF of PBGM01-Treated GLB1—/—mice and Vehicle-Treated Controls (Day 300)

The figures below show β-gal activity in the brain, heart and liver following necropsy. In the brain, β-gal activity increased in a dose-dependent manner in PBGM01-treated GLB1—/—mice. Average β-gal activity for all dose groups was higher than that of the vehicle-treated GLB1—/—controls. However, only the two highest dose groups exhibited higher average β-gal activity than that of the vehicle-treated GLB1+/—controls at both assessment points.

Some peripheral organs also exhibited dose-dependent increases in β-gal activity after PBGM01 administration. The heart displayed dose-dependent increases in β-gal activity, resulting in average levels higher than that of vehicle-treated GLB1—/—mice at all doses. However, only the two highest doses restored β-gal activity to levels similar to or higher than that of vehicle-treated GLB1+/—controls at both assessment points.

The liver displayed dose-dependent increases in β-gal activity after PBGM01 administration. At all doses except the lowest dose, average β-gal activity levels at both assessment points were higher than that of vehicle-treated GLB1—/—mice and similar to or higher than that of vehicle-treated GLB1+/—controls.

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β-Galactosidase Activity in Brain, Heart and Liver of PBGM01-treatedGLB1—/—Mice and Vehicle-Treated Controls

NHP Toxicology Study

A 120-day good laboratory practice, or GLP, -compliant toxicology study was conducted in NHPs to assess the safety, tolerability and biodistribution and excretion (shedding) profile of PGM01 following ICM administration.

Juvenile male and female rhesus macaques received a single ICM administration of vehicle or one of three dose levels of PGM01. Animals from each cohort were euthanized either 60 or 120 days following administration. In-life evaluations included clinical observations performed daily, multiple scheduled physical exams, standardized neurological monitoring, sensory nerve conduction studies, or NCS, body weights, clinical pathology of the blood and CSF, evaluation of serum-circulating NAbs and assessment of vector pharmacokinetics and vector excretion. Animals were necropsied, and tissues were harvested for a comprehensive histopathological examination, measurement of T-cell responses and biodistribution analysis.

Key results from this study were:

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The figures below show the degeneration in the DRG, the spinal cord and median nerve axon and median nerve fibrosis as of day 120, as measured by histological analysis and scoring of severity of lesions from 0 (none) to 5 (severe). The two animals that exhibited the most severe axon loss and fibrosis with decreased sensory nerve action potential, or SNAP, are shown in red.

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Severity of DRG, Spinal Cord and Median Nerve Lesions at Day 120

The figures below show the change in median sensory nerve conduction as of each measuring point in the study, as measured by median sensory action potential in microvolts.

Median Sensory Nerve Conduction Studies

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Clinical development

Our clinical development plan is to start with trials in infantile GM1, and if successful, explore expansion of the indication with trials in later onset forms of GM1.

We expect to initiate patient enrollment of a multi-center, open-label, single-arm Phase 1/2 clinical trial of PBGM01 in patients with a diagnosis of early and late infantile GM1 beginning in the first quarter of 2021. Our initial cohort will be in patients with late infantile GM1, and we expect to report initial 30-day safety and biomarker data from this cohort mid-year 2021.

We plan to specifically study early and late infantile patients in separate, smaller cohorts. We plan to enroll a total of four cohorts of two patients each, with separate dose-escalation cohorts for late onset infantile GM1 patients (with onset prior to 18 months in age) and early onset infantile GM1. This will test a low dose that exceeds the MED, as determined in our preclinical studies, and a 3-fold greater high dose. The first cohort will be in patients diagnosed with late infantile GM1 (greater than 12 months in age) with low dose treatment. There will be a 60-day interval between subjects dosed within a cohort to allow review of biomarker and safety data before dosing the next subject.

Following the completion of this first cohort and review of safety outcomes, we will simultaneously commence recruitment for both the high dose late infantile GM1 and the low dose early infantile GM1 cohorts. Upon completion of the low dose early infantile cohort, a high dose cohort will be enrolled. Following these dose-escalation cohorts, each patient population will be enrolled into a confirmatory cohort. Patients will be evaluated over two years for safety and efficacy, followed by an additional 36 months of long-term follow up.

We expect that pre-specified primary endpoints will include safety and efficacy. Efficacy will be evaluated by prevention of further developmental regression and by restoration of developmental trajectories, as measured by developmental milestones using accepted clinical scales, observer-reported outcomes and video recordings. Secondary outcomes will include serum and CSF β-gal enzyme activity and disease progression endpoints including evaluations using EEG and MRI. Our initial biomarker data will include blood and CSF β-gal enzyme activity. While blood β-gal activity is generally measurable due to the normal activity levels found in blood, it may be difficult to detect in the CSF due to lower normal activity levels in the CSF. We are working on improving our analytical capabilities to detect lower levels of B-gal activity. Due to our ICM delivery, we believe that if a treatment-related increase in blood B-gal activity is detected, this will suggest that there has also been a treatment-related increase in CSF β-gal enzyme activity.

Depending on the results from the dose escalation cohorts we plan to obtain input from regulatory agencies on the requirements to submit for regulatory approval for commercialization in the United States and internationally.

Natural History Data

We are currently funding a GM1 natural history study being conducted by Penn’s ODC to collect prospective data on clinical disease progression in infantile and juvenile GM1. This data will be used to construct natural history patient profiles for use as matched case controls for comparison to the profiles of treated participants in our planned Phase 1/2 clinical trial.

Regulatory Designations

In April 2020, the FDA granted Orphan Drug Designation, or ODD, and in May 2020, the FDA granted Rare Pediatric Disease Designation, or RPDD, to PBGM01 for the treatment of GM1 gangliosidosis. We believe these designations represent an important recognition of the dire need for an effective treatment option for those suffering from GM1. The ODD grants us financial incentives to support clinical development and the potential for up to seven years of market exclusivity in the U.S. upon regulatory approval, while the under the RPDD program, a sponsor who receives approval for a drug or biologic for a “rare pediatric disease” may qualify for a priority review voucher that may be sold or transferred. In October 2020, the European Commission granted ODD to PBGM01.

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Clinical Trial Approvals

In December 2020, the FDA notified us that our IND for PBGM01 was cleared, which allows us to proceed with our clinical trial. In December 2020 and January 2021, we also received approval of our CTA for our Imagine-1 Trial for PBGM01 from MHRA and Health Canada, respectively.

We have manufactured the PBGM01 clinical supply and have established a clinical supply chain to support global clinical trial, including in the United States, the UK and Canada.

FTD—PBFT02

Overview of FTD-GRN

FTD is one of the more common causes of early-onset (midlife) dementia, causing impairment in behavior, language and executive function, and occurs at similar frequency to Alzheimer disease in patients younger than 65 years. FTD presents as a rapidly progressive clinical syndrome. Changes in personal and social conduct occur in early stages of the disease, including loss of inhibition, apathy, social withdrawal, hyperorality (mouthing of objects) and ritualistic compulsive behaviors. These symptoms are severely disabling and may lead to misdiagnosis as a psychological or emotionally based problem, or, in the elderly, be mistaken for withdrawal or eccentricity. FTD progresses to immobility and loss of speech and expression. Survival averages eight years after onset of symptoms.

In approximately 5% to 10% of individuals with FTD, the disease is caused by mutations in the granulin, or GRN, gene, causing a deficiency of progranulin. PGRN is a complex and highly conserved protein thought to have multiple roles in cell biology, development and inflammation. Emerging evidence suggests that PGRN’s pathogenic contribution to FTD and other neurodegenerative disorders relates to a critical role in lysosomal function.

There are no disease modifying therapies approved for the treatment of FTD. Anti-depressants have been shown to manage some behavioral symptoms. We engaged a third-party data-analytics firm to conduct an analysis of a variety of de-identified electronic medical records. Based on this analysis, we estimate the prevalence of FTD in the United States to be approximately 62,000. The prevalence of FTD due to GRN mutation found in literature is 5% to 10%. Accordingly, we estimate the prevalence of FTD-GRN deficiency in the United States to be approximately 3,000 to 6,000.

Program selection

We chose FTD-GRN as one of our initial lead programs because it meets our criteria for rare, monogenic CNS disorders in which we believe we can develop product candidates with a higher probability of technical and regulatory success:

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Our Product Candidate

We are developing PBFT02 to treat FTD-GRN with a single dose of PBFT02 by ICM injection. PBFT02 is a gene therapy that utilizes an AAV1 viral vector to deliver a modified DNA encoding the GRN gene to a patient’s cells. The goal of this vector and delivery approach is to provide higher than normal levels of PGRN to the CNS to overcome the progranulin deficiency in GRN mutation carriers, who have been observed to have reduced CSF PGRN levels ranging from 30% to 50% of the PGRN levels observed in normal, mutation non-carriers. We selected the AAV1 capsid and ICM delivery route due to the superior transduction of the transgene observed in NHP studies throughout the brain, including particularly high transduction of the ependymal cells that line the ventricles (CSF spaces) of the brain and secrete CSF, which circulates around the brain. Secretion of PGRN into the CSF by ependymal cells is expected to increase CSF levels of PGRN and the bioavailability of PGRN to other brain regions.

Preclinical studies

Proof-of-Concept Pharmacology Mouse Model

A pharmacology study was conducted in a mouse model using an AAVhu68 vector to assess whether delivery of the human GRN gene to the brain can elevate brain PGRN levels, eliminate existing lysosomal storage material and reduce the upregulated lysosomal enzyme HEX activity in GRN—/–mice (shown in the figures below as knockout, or KO, mice), which are present in the brain of GRN—/–mice as early as two months of age. Therefore, we treated GRN—/–mice at two to three months of age with an ICV injection of either an AAVhu68 vector expressing human GRN (shown in the figures below as AAV) or PBS vehicle, with ten mice in each group. In addition, a cohort of ten wild type, or WT, mice were injected with vehicle. Animals were euthanized 60 days after injection and necropsy was performed.

Biomarker Evaluation

The level of human PGRN protein in the brain and CSF (in nanograms per milliliter, or ng/mL) was measured using an enzyme-linked immunosorbent assay, or ELISA, to determine transduction levels. As shown in the figure below on the right, measurable levels of human PGRN were confirmed in the brain in the AAV-treated group, while in both the vehicle-treated and wild type groups, human PGRN was below detection levels. We further evaluated PGRN protein levels in the CSF, as shown in the figure below on the left. AAV-treated mice displayed a higher average CSF concentration of human PGRN than both the vehicle-treated and wild type groups.

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AAV Mediated Expression of Human PGRN (hPGRN) Protein in the CSF and Brain

Histological analysis

After confirming PGRN protein expression in the brain of GRN—/–mice, we assessed whether PGRN overexpression reduced the number of lipofuscin deposits in the hippocampus, thalamus and cortex. As shown in the figure below, AAV-treated GRN—/–mice exhibited fewer lipofuscin deposits (indicated by fluorescent spots) in all brain regions compared to those of vehicle-treated GRN—/–mice and comparable lipofuscin deposits to wild-type mice.

Comparison of Lipofuscin Deposits in the Brain

*p<0.05, ***p<0.001, ****p<0.0001

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Vector Comparison Study in Non-Human Primates

PBFT02 utilizes an AAV1 vector to deliver to the brain a functional GRN gene encoding progranulin. The AAV1 vector was chosen over other potential vectors because it demonstrated a high tropism for the ependymal cells that line the brain ventricles in NHP studies.

A study was conducted that was designed to evaluate the expression of human PGRN protein in the CSF of adult NHPs following ICM delivery of different AAV vectors. The primary goal of the study was to determine whether ICM AAV delivery could achieve CSF PGRN levels similar to those demonstrated to be pharmacologically active in the knockout mouse model, and to identify the vector capsid and transgene sequence that achieved the most robust expression. In the study, adult rhesus macaques received a single ICM injection of an AAV1, AAV5 or AAVhu68 vector expressing human GRN, with two NHPs per group. The AAVhu68 (v2) vector utilized a different GRN coding sequence and different promoter than what was used in the other vectors evaluated. Human PGRN protein was measured by enzyme-linked immunosorbent assay in the CSF and plasma. Increasing expression of PGRN outside of the CNS should not be required for the treatment of FTD-GRN, and the levels of PGRN protein in plasma was measured to ascertain if any of the vectors disproportionality increased PGRN outside of the CSF, which could cause potentially undesirable side effects.

The figures below show that production of human PGRN protein in the CSF of all treated NHPs exceeded levels found in healthy normal human control samples. Production was highest in the CSF of NHPs treated with the AAV1 vector, resulting in concentrations more than 50-fold higher than normal human CSF PGRN concentrations. PGRN production in plasma was similar to normal human control levels for the AAVhu68 and AAV1 vectors. Plasma analysis was not performed on the AAVhu68 (v2) group.

Production of Human PGRN Protein in CSF and Plasma of NHPs following ICM AAV Delivery

In this NHP study, animals were necropsied 28 days after vector administration. Ependymal cell transduction was evaluated by immunohistochemistry in multiple regions of the brain of animals treated with AAVhu68 and animals treated with AAV1. As shown in the figure below, transduction of the ependymal cells (as shown by density of darkened ependymal cells) was substantially higher in the animals treated with AAV1 (48%) as compared to the animals treated with AAVhu68 (1-2%).

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Ependymal cell transduction following ICM delivery of AAV1 and AAVhu68 vectors expressing GFP in NHPs

Based on the results from the NHP vector comparison study, we selected AAV1 as the capsid for our PBFT02 product candidate.

In our NHP preclinical studies, the production of PGRN using a AAV1 capsid was 3 to 5 times greater than AAVhu68 and AAV5. Thus, we believe PBFT02 has the potential to provide a large CNS depot of progranulin that could be taken up by neurons broadly throughout the brain, restoring lysosomal function and neuronal survival, thereby slowing or stopping progression of the FTD. Further, AAV1 does not strongly transduce the liver and does not result in comparatively elevated levels of circulating PGRN. This may be an advantage by reducing the potential risk of unknown side effects of PGRN outside the CNS.

GRN mutation carriers have been demonstrated to have reduced CSF progranulin levels ranging from 30% to 50% of the PGRN levels observed in normal, mutation non-carriers. Based on our preclinical studies, we believe that PBFT02 has the potential to sufficiently increase extracellular PGRN levels to overcome intracellular PGRN deficiency, without greatly increasing peripheral PGRN levels.

Pharmacology Study in GRN —/— mice to determine the Minimally Effective Dose

A pharmacology study was conducted to evaluate the MED in a GRN—/— mouse model following ICV administration of PBFT02. In this study, GRN—/— mice at 6.5 to 8.5 months old were administered PBFT02 at four separate dose levels and evaluated for 90 days. Other GRN—/—mice and wildtype mice were administered with vehicle. The initial age of administration was chosen because at this age, increased lipofuscin deposits and upregulated lysosomal HEX activity are observed in the brain of GRN—/—mice. This age also allowed evaluation of neuroinflammation, which develops later in disease progression, by 5 months of age. Thus, these mice mirror the developmental stage of the intended patient population (young/mature adult to middle-age adult) and allow evaluation of disease-relevant neuropathological features. As GRN—/— mice do not exhibit overt neurodegeneration or neurological symptoms, and they have a normal lifespan, the study duration was 90 days. The study duration was chosen to allow for evaluation following the expected onset, peak and plateau of transgene expression. Ninety days also allowed for detection of changes in the biochemical and neuropathological findings already present in the GRN—/—mice at the time of PBFT02 administration and was considered a sufficient duration for detecting post-treatment improvement in disease-relevant phenotypes.

In this study, administration of PBFT02 to GRN—/— mice resulted in a dose-related correction of histopathology with the broadest treatment-related effects on lipofuscin, neuroinflammation and lysosomal enzyme activity observed at the highest dose. The lowest dose of PBFT02 was considered to be the minimally effective dose, as it significantly improved key neuropathological features found in patients with GRN-related neurodegeneration, including prevention of lipofuscin accumulation in the thalamus and a reduction in neuroinflammation defined by CD68 expression in the hippocampus.

PGRN expression

Human PGRN expression was measured in the CSF of necropsied mice 90 days after PBFT02 administration. As shown in the figure below, human PGRN expression in CSF increased at the two highest doses of PBFT02 compared to that of vehicle-treated GRN—/—controls. Human PGRN expression in GRN—/—mice administered the twolowest doses of PBFT02 appeared similar to that of the vehicle-treated GRN—/—mice and wild type controls. However, the limit of detection, or LOD, for the PGRN ELISA assay was 1.25 ng/mL, thus limiting the ability to detect changes in PGRN expression at the two lowest doses and in the vehicle-treated GRN—/—and wild type controls.

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PRGN Expression in CSF of GRN—/—Mice Administered PBFT02 or Vehicle

Histological Analysis of Brain Abnormalities

The thalamus, cortex and hippocampus were selected for quantification of lipofuscin deposits and CD68 expression because elevated lipofuscin accumulation and neuroinflammation/microgliosis are evident in these brain regions in GRN—/—mice. Furthermore, these brain regions exhibit extensive neuropathology in patients with GRN-related neurodegeneration.

Lipofuscin deposits

Lipofuscin deposits were quantified in three brain regions (thalamus, cortex and hippocampus) of mice necropsied at baseline and 90 days after PBFT02 administration, or Day 90. The figures below show that at both baseline and Day 90, lipofuscin deposits were more abundant in the thalamus compared to the cortex and hippocampus, suggesting that the thalamus might provide greater sensitivity for evaluating lipofuscin aggregates than the other brain regions.

In the thalamus, a higher baseline lipofuscin count was observed in untreated GRN—/—mice than in untreated wild type controls. At Day 90, the average lipofuscin count in vehicle-treated GRN—/—mice was higher than that of the untreated GRN—/—baseline controls, indicating a progressive increase in lipofuscin deposits. In contrast, all PBFT02-treated groups displayed significantly lower lipofuscin counts than that of vehicle-treated GRN—/—mice. Because average lipofuscin counts in all PBFT02-treated groups were similar to that of the untreated GRN—/—baseline controls, PBFT02 administration at all dose levels appeared to prevent the progressive accumulation of lipofuscin during the 90-day study.

In the cortex and hippocampus, higher average lipofuscin counts were also observed in vehicle-treated GRN—/—mice than in vehicle-treated wild type mice at Day 90. All PBFT02-treated dose groups displayed fewer average lipofuscin counts at Day 90 than vehicle-treated GRN—/—mice, although the reduction was only statistically significant in the cortex at the third highest dose. No dose-dependent response was observed, as lipofuscin counts were similar among all four PBFT02 dose groups.

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Quantification of Lipofuscin Deposits in the Brain of GRN—/–Mice Administered PBFT02 or Vehicle

*p<0.05, **p<0.01, ***p<0.001, ****p<0.0001

Neuroinflammation

The neuroinflammatory marker CD68 was quantified in three brain regions (thalamus, cortex and hippocampus) of necropsied mice at baseline and 90 days after PBFT02 administration. The figures below show that at baseline and on Day 90, higher average CD68 expression was observed in the thalamus, cortex and hippocampus of untreated GRN—/–mice when compared to that of untreated wild type controls. In the thalamus on Day 90, a generally dose-dependent response was observed with the three highest PBFT02 dose groups displaying significantly reduced CD68 expression compared to that of vehicle-treated GRN—/–mice. Of note, mice administered the highest dose of PBFT02 exhibited an approximately 4-fold reduction in CD68 expression compared to that of vehicle-treated GRN—/–mice. In the cortex on Day 90, average CD68 expression was reduced in all PBFT02-treated groups, although the reduction was not significantly different from CD68 expression in the vehicle-treated GRN—/–mice. No dose-dependent response was observed. In the hippocampus on Day 90, all PBFT02 dose groups displayed significantly lower CD68 expression compared to that of vehicle-treated GRN—/–mice. Moreover, CD68 expression was similar to that of vehicle-treated wild type controls for all doses of PBFT02. This response was not dose-dependent, as expression of CD68 was similar at all doses of PBFT02.

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Quantification of CD68 Expression in the Brain of GRN—/–Mice Administered PBFT02 or Vehicle

*p<0.05, **p<0.01, ***p<0.001, and ****p<0.0001

Lysosomal Enzyme Activity (Hexosaminidase Activity)

A HEX activity assay was performed at baseline and 90 days after PBFT02 administration on lysates of the third frontal part of the brain, because lysosomal enzymes are frequently upregulated in lysosomal storage diseases, an observation that has been confirmed in GM1 patients. At baseline, brain HEX activity was higher in untreated GRN—/—mice than untreated wild type controls. At Day 90, GRN—/—mice administered the highest PBFT02 dose exhibited significantly reduced brain HEX activity compared to that of vehicle-treated GRN—/—mice. Moreover, HEX activity in the highest dose group was similar to that of vehicle-treated wild type controls, indicating normalization of brain HEX levels at this dose.

NHP Toxicology Study

A 90-day, GLP-compliant toxicology study was conducted in NHPs to assess the safety, tolerability and biodistribution and excretion (shedding) profile of PBFT02 following ICM administration.

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In this study, adult male and female rhesus macaques received a single ICM administration of vehicle or PBFT02 at one of three dose levels. Animals from each cohort were euthanized 90 days following administration. In-life evaluations included clinical observations performed daily, standardized neurological monitoring, sensory nerve conduction studies, or NCS, body weights, clinical pathology of the blood and CSF, evaluation of serum-circulating NAbs to the vector capsid, and assessment of vector pharmacokinetics and vector excretion. Animals were necropsied, and tissues were harvested for a comprehensive histopathological examination, measurement of T cell responses to the vector capsid and transgene product, biodistribution analysis, and evaluation of human PGRN expression and anti-human PGRN antibody responses.

Key results from this study were:

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A comparison of the maximum expression of human PGRN in the CSF of NHPs to that of healthy human CSF showed that the mid and high doses of PBFT02 dose resulted in approximately 15-fold higher PGRN expression than that of healthy human CSF, while the lower dose of PBFT02 dose resulted in approximately 7-fold higher PGRN expression than that of healthy human CSF. We believe these pharmacology data support the possibility of achieving therapeutic PGRN expression levels and cross-correction in the CNS of FTD patients following ICM administration of PBFT02.

Human PGRN protein

Clinical development

Our clinical development plan is to treat FTD-GRN with a single dose of PBFT02 via ICM injection, with our initial clinical trial focused on early symptomatic FTD patients who have the GRN mutation.

We have an active IND for PBFT02, and plan to initiate patient enrollment of a multi-center, open-label, single-arm Phase 1/2 dose escalation clinical trial of PBFT02 in patients with a diagnosis of FTD with a GRN mutation beginning in the United States in the first half of 2021. We expect to report initial 30-day safety and biomarker data from the first cohort in late 2021 or early 2022.

This trial is expected to be a two-cohort dose-escalation trial, with three subjects per cohort and the potential for a third higher-dose cohort. The planned starting dose will exceed the MED in the GRN knockout mouse model, with planned escalation to a 3-fold higher dose. The primary endpoint of the trial is to assess safety and tolerability over 60 months. Secondary endpoints are to assess change from baseline to 24 months on biomarkers, (including CSF and plasma progranulin levels, biomarkers of neurodegeneration and disease progression), and on clinical outcomes as measured by the Clinical Dementia Rating (CDR®) for improving evaluation of patients with frontotemporal lobar degeneration (FTLD), or CDR® plus NACC FTLD, and other neurocognitive assessments. Interim analyses are planned for certain biomarkers starting at one month post dosing and for clinical outcomes beginning at one year post dosing. The independent data monitoring committee, or IDMC, will

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review 30-day biomarker data and safety data for each subject in a cohort. All subjects will be followed for a total of five years to monitor safety and selected biomarker and efficacy measures. All subjects will be evaluated over two years for safety and efficacy, followed by an additional 36 months of long-term follow up.

A scientific advice meeting with MHRA was held in November 2020, providing feedback on our proposed protocol. We also intend to seek feedback from other regulatory agencies outside the United States.

Depending on the results from the initial cohorts, we plan to obtain input from regulatory agencies on the requirements to submit for regulatory approval for commercialization in the United States and internationally.

Regulatory designations

In January 2021, the FDA granted ODD to PBFT02 for the treatment of FTD-GRN. We believe this designation represents an important recognition of the dire need for an effective treatment option for those suffering from FTD-GRN. The ODD grants us financial incentives to support clinical development and the potential for up to seven years of market exclusivity in the United States upon regulatory approval. The FDA has recently granted Fast Track designation for PBFT02. Fast Track designation is a process designed to facilitate the development and expedite the review of drugs to treat conditions and fill unmet medical need.

Clinical Trial Approvals

In January 2021, the FDA notified us that our IND for PBFT02 was cleared, which allows us to proceed with our clinical trial.

We have manufactured the PBFT02 clinical supply to support clinical trial initiation in the United States.

Krabbe disease—PBKR03

Overview of Krabbe disease

Krabbe disease is a rare and often life-threatening lysosomal storage disease that presents early the patient’s life, resulting in progressive damage to both the brain and PNS. Infants may present with extreme irritability and excessive crying, feeding difficulties, fisted hands, poor head control, stiffness and arching. The early infantile form of Krabbe disease typically manifests before six months of age and is the most severe form, accounting for 60% to 70% of Krabbe disease diagnoses. In these patients the disease course is highly predictable and rapidly progresses to include loss of acquired milestones, staring episodes, apnea, peripheral neuropathy, severe weakness, unresponsiveness to stimuli, seizures, blindness, deafness and death by two years of age. Late infantile patients present symptoms that are similar to those of early infantile Krabbe disease, with a median survival of approximately five years from onset of symptoms. Late infantile Krabbe disease is defined by onset between seven to twelve months of age. It comprises approximately 10% to 30% of cases and exhibits greater variability in clinical presentation.

Krabbe disease is an autosomal recessive lysosomal storage disease caused by mutations in the GALC gene, which provides instructions for making an enzyme called galactosylceramidase, which breaks down certain fats, including galactosylceramide and psychosine. The myelin-producing cells in the CNS and PNS are particularly sensitive to the accumulation of psychosine, resulting in widespread death of these cell populations. Without myelin, nerves in both the brain and other parts of the body cannot transmit signals properly, leading to the signs and symptoms of Krabbe disease.

There are currently limited treatment options for patients with Krabbe disease. While human stem cell transplant, or HSCT, has become standard of care in many centers in the US for early infantile Krabbe patients who are pre-symptomatic or who have mild symptoms, it has limited use outside the US and is a treatment with limitations. Most HSCT-treated children still have progressive gross motor delays ranging from mild spasticity to inability to walk independently, and limited use of their upper extremities. There is also a narrow window of treatment and, of course, a donor must be identified. When performed after the onset of overt symptoms in these patients, HSCT provides only minimal neurologic improvement and does not substantially improve survival.

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Currently, nine states conduct mandatory screening for Krabbe disease and an additional four states passed legislation to include Krabbe disease in mandatory screening, but such screening has not yet been added. We engaged a third party data-analytics firm to conduct an analysis of screening data from the six states with screening history and based on this evaluation of screening data, we believe the incidence of Krabbe disease to be approximately 2.6 in 100,000 births.

Program Selection

We chose infantile Krabbe disease as one of our first clinical programs because it met our criteria for rare, monogenic CNS disorders in which we believe we can develop product candidates with a higher probability of technical and regulatory success. The indication presents cross-correction, biomarker data and preclinical validation that are supportive of advancing treatments for Krabbe disease into the clinic.

Our Product Candidate

We are developing PBKR03 to treat infantile Krabbe disease, the most common and severe form of Krabbe disease. PBKR03 utilizes a next-generation AAVhu68 capsid to deliver DNA encoding the GALC enzyme to a patient’s cells. PBKR03 will be administered as a single dose by ICM injection into the CSF.

The AAVhu68 capsid and ICM route of administration were selected for the superior transduction observed in preclinical studies for cells of the CNS and PNS, which are both affected in Krabbe disease patients. This vector has the potential to provide corrective GALC enzyme to both the CNS and PNS, which we believe could treat both the CNS pathologies and the significant peripheral neuropathy observed in many Krabbe disease patients.

Preclinical studies

Vector Selection Study in Pre-Symptomatic Twitcher Mice

A proof of concept study was conducted in pre-symptomatic twitcher mice to establish the route of administration, capsid and dose range best suited for treating infantile Krabbe disease. A twitcher mouse, denoted in the following figures as twi/twi, is a naturally-occurring mouse mutant caused by an abnormality in the gene coded for galactosylceramidase, and therefore is genetically equivalent to Krabbe disease. Four different AAV capsids encoding human GALC were tested: AAV3b, AAV5, AAV1 and AAVhu68. Each AAV vector was administered ICV. As a control, a group of pre-symptomatic twitcher mice were administered PBS vehicle only. As shown in the figure below, while all four capsids enhanced survival compared to the vehicle-treated control mice, the AAVhu68 capsid yielded superior survival over AAV3b, AAV5 and AAV1. Therefore, we selected the AAVhu68 capsid for subsequent studies.

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Survival Curves Following ICV Delivery of GALC to Presymptomatic Twitcher Mice Using Different AAV Capsids

Pharmacodynamic Study in Twitcher Mice

After selecting our AAVhu68 capsid for use, we then used the twitcher mouse model to examine treatment effects of PBKR03. In preclinical studies, PBKR03 was delivered into the CSF by ICV injection.

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As shown in the figures below, 28 days after ICV administration of PBKR03, GALC activity levels observed in the brain, liver and serum of PBKR03-treated twitcher mice were higher than the levels observed in the same tissues of vehicle-treated twitcher mice and healthy control mice (denoted by +/+ in the figure below).

Pharmacology Study in Twitcher Mice

A pharmacology study in early-symptomatic twitcher (twi/twi) mice was also conducted. Twitcher mice were ICV-administered PBKR03 on post-natal day, or PND, 12. Other age-matched early symptomatic twitcher mice, unaffected heterozygotes (twi/+) and wild-type (+/+) mice were ICV-administered PBS vehicle only on PND 12. PND 12 was selected as the day of dosing because it is shortly after the onset of PNS demyelination in an animal with brain maturation equivalent to a 2-month-old infant.

Beginning ten days after administration, all mice were monitored daily for clinical signs. Clinical signs were scored using an assessment of clasping ability, gait, tremor, kyphosis, and fur quality. These measures effectively assess the clinical status of subject mice based upon the symptoms they typically present. Scores above 0 indicate clinical deterioration.

Using this assessment, early-symptomatic twi/twi mice administered PBKR03 displayed clinical scores close to 0, which was comparable to the scores of unaffected twi/+ and +/+ mice, as shown in the figure below. In contrast, the age-matched vehicle-treated twi/twi mice displayed higher assessment scores over most of the time course, indicating clinical deterioration.

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Clinical Scoring

As a complementary functional assay, the rotarod test, a commonly used test to evaluate motor coordination in mice, was performed on PND 35. As shown in the figure below, the early symptomatic PBKR03-treated twi/twi mice displayed fall latencies comparable to those of the unaffected twi/+ and +/+ mice, while the age matched vehicle-treated twi/twi mice displayed statistically significantly shorter fall latencies (p<0.05), indicating deterioration of neuromotor function.

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Complementary Functional Assay: Rotarod Day 35—Symptomatic Treatment

To determine whether the observed benefits of PBKR03 administration on functional endpoints correlated with histologic improvements, all mice were necropsied 28 days following ICV administration, and the sciatic nerve of the hind limb was examined histologically. The sciatic nerve was selected for histology because peripheral nerves are more affected by demyelination in twi/twi mice compared to the CNS.

As shown in the figures below, the sciatic nerve of vehicle-treated +/+ controls was enriched with myelin (dark blue staining) and generally devoid of globoid cell infiltrates (pink staining). However, in vehicle-treated symptomatic twi/twi mice, severe subtotal demyelination was observed in the sciatic nerve, accompanied by nerve thickening and the infiltration of globoid cells. In contrast, myelin was preserved in the sciatic nerve of symptomatic PBKR03-treated twi/twi mice, although not to the extent observed in age-matched +/+ mice. Fewer globoid cells were also observed in the nerve of PBKR03-treated twi/twi mice compared to vehicle treated twi/twi mice.

Sciatic Nerve Histology Following ICV Administration of PBKR03 to Symptomatic Twitcher Mice:

Pharmacology Study in Twitcher Mouse Model to determine the Minimally Effective Dose

A pharmacology study was conducted to determine the MED and GALC expression levels in the twitcher mouse model of infantile Krabbe disease following ICV administration of PBKR03. In this study, juvenile twi/twi mice

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(postnatal day, or PND, 10 to 14) received a single administration of PBKR03 at one of four dose levels. Additional twi / twi mice and wild type mice were administered either vehicle or remained untreated as controls. The age of the animals was selected to model the disease stage of early-symptomatic infantile Krabbe disease patients.

In this study, the MED was determined to be the third highest dose (out of four) because this dose led to significant improvements in survival, body wasting and failure to thrive (body weight loss), Krabbe disease-related clinical symptoms (clinical assessment scoring), and the prevention of phenotypic lymphopenia (suggestive of a reduction in autonomic neuronal degeneration) when compared to vehicle-treated controls. This dose increased myelination and reduced globoid cell infiltration and neuroinflammation in the brain, while also reducing globoid cell size in the brain and spinal cord compared to that seen in vehicle-treated controls. This dose was also the minimal dose leading to significantly increased GALC enzyme expression in the brain, which is a key target tissue.

Naturally occurring Krabbe dog model

The Krabbe dog is a naturally occurring autosomal recessive disease model derived from a spontaneous mutation in the GALC gene. The mutant GALC protein has residual enzymatic activity close to 0%, which is similar to GALC activity levels observed in patients with the infantile form of Krabbe disease.

A preclinical study was conducted in the Krabbe dog model evaluating treatment with an AAVhu68 vector containing a codon-optimized canine GALC cDNA, which we refer to as AAV-treated dogs, or vehicle administered directly to the CSF using the ICM route of administration. In this study, four Krabbe dogs were treated with a single administration of PBKR03, two Krabbe dogs were treated with a sham and one wild type control dog was also treated with a sham.

Survival

The two vehicle-treated Krabbe dogs reached the pre-defined humane endpoint, characterized by severe hind limb weakness and inability to stand and walk, on Day 35 or Day 66, which was consistent with the natural history of the disease. In contrast, all four PBKR03-treated dogs maintained normal motor function and did not reach the pre-defined humane endpoint associated with hind limb paralysis.

One of the AAV-treated dogs was euthanized following a suspected seizure at 39 weeks. Prior to seizure, the animal exhibited normal phenotype. The pathology report revealed Krabbe-related lesions of demyelination and globoid cell infiltration that were less pronounced than vehicle-treated Krabbe dog controls, and similar to the two treated dogs from the 28 weeks scheduled necropsy timepoint. The spinal cord and peripheral nerve showed no demyelination, suggesting treatment effect was maintained and consistent with normal motor function of this animal prior to the seizure. Another of the AAV-treated dogs was euthanized at 19.5 months (82 weeks) of age due to body weight loss. The body weight loss was a result of recurrent vomiting and regurgitation. Following necropsy and histopathology of this dog, moderate demyelination and globoid cell infiltration of the vagus nerve, and moderate atrophy of the esophageal myenteric plexus was observed. Autonomic nerve (vagus nerve) dysfunction may be Krabbe disease-related and have contributed to weight loss in this dog.

GALC expression

As shown in the figure below, CSF GALC enzyme activity was detectable above baseline levels measured on Day 0 in all AAV-treated Krabbe dogs by 28 days post treatment. Levels were maintained at or above vehicle-treated wild type GALC activity levels for the duration of the study for each AAV-treated Krabbe dog, including up to 19.5 months post treatment. Expression levels in AAV-treated Krabbe dogs remained relatively stable for the duration of the study in most animals except Animal K933, which exhibited a notable peak in GALC enzyme activity on Day 28 followed by a decline to stable levels by Day 100 through 19.5 months post treatment. Finally, at Day 28 and Day 70, GALC enzyme activity levels in all AAV-treated Krabbe dogs exceeded that of the vehicle-treated controls prior to humane euthanasia.

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CSF GALC activity—AAV-treated

Psychosine levels in CSF

Psychosine was undetectable in the CSF of vehicle-treated wild type dogs from Day 0 through Day 180 post treatment. While psychosine was undetectable in the CSF of both vehicle-treated Krabbe dogs at baseline (Day 0), psychosine became elevated in both animals on Day 28, and levels increased further by the time of humane euthanasia. Elevations in psychosine correlated with the onset and progression of neurological symptoms in the vehicle-treated Krabbe dogs.

In contrast, psychosine was undetectable at most time points for all four AAV-treated Krabbe dogs. One animal exhibited undetectable levels of psychosine at all time points evaluated, while either mild or transient elevations were observed for the other animals.

Nerve Conduction Studies

As shown in the figures below, periodic NCV recordings demonstrated slowed or undetected signals in sham-treated Krabbe dogs, while all four AAV-treated Krabbe dogs had normalized velocities similar to the wild type control dog.

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Nerve Conduction Velocities in Motor and Sensory Nerves

Brainstem auditory evoked response (BAER) pathway central conduction

As hearing loss is common during Krabbe disease progression, hearing threshold under the Brainstem Auditory Evoked Response, or BAER, test was evaluated. Hearing threshold could not be determined (> 90 dB) in one vehicle-treated Krabbe dog but were similar to the vehicle-treated wild type dog in the other vehicle-treated Krabbe dog. All the treated Krabbe dogs had hearing thresholds similar to the vehicle-treated wild type dog for the entire duration of the study until euthanized at 19.5 months (82 weeks) of age.

Histological Analysis

A histological analysis evaluating myelination and neuroinflammation levels was also conducted.

As shown in the figures below, all four AAV-treated Krabbe dogs exhibited increased myelination and reduced globoid cell infiltration in the brain, spinal cord and peripheral nerves by histology when compared to the vehicle-treated Krabbe dogs.

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Semi-Quantitative Scoring of Demyelination and Globoid Cell Infiltration in the Nervous System of Krabbe Dogs Following ICM Administration of AAV.

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Body Weights

As shown in the figure below, growth and body weight gain were normal in all treated dogs. One AAV-treated dog was euthanized due to weight body loss at 19.5 months of age (82 weeks).

Age (weeks)Body Weight Curve

Further, as shown in the figure below, after day 70, none of the dogs exhibited meaningful CSF pleocytosis, or increase in white cell count, with normal wild-type dog levels shown by the dotted line. There were no treatment-related histopathological lesions at 6 months in the AAV-treated Krabbe dogs.

Clinical pathology (hematology and clinical chemistry)

Three AAV-treated Krabbe dogs presented a mild and transient lymphocytosis 2 weeks post-injection. This finding is possibly treatment-related as it was not observed in the vehicle-treated Krabbe or wild type animals. It is not considered adverse due to low grade elevation and transient nature.

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There was no vector related modification of coagulation parameters nor serum clinical chemistry.

Two AAV-treated Krabbe dogs presented transient mild CSF mononuclear pleocytosis 4 weeks post-injection. This finding is vector related and not considered adverse as it was self-limited and not accompanied by any neurological signs.

GLP NHP Toxicology Study

A 180-day GLP-compliant toxicology study was conducted in NHPs to assess the safety, tolerability and biodistribution and excretion (shedding) profile of PBKR03 following ICM administration.

Juvenile male and female rhesus macaques received a single ICM administration of PBKR03 at one of 3 doses (low, med, high). Animals from each cohort were euthanized either 90 or 180 days following administration. In-life evaluations included clinical observations performed daily, physical exams, standardized neurological monitoring, sensory NCS, body weights, clinical pathology of the blood and CSF, evaluation of serum-circulating NAbs, assessment of vector pharmacokinetics and vector excretion, and evaluation of GALC enzyme expression and antibodies against anti-human GALC antibodies in CSF and serum.

Key results from this study were:

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Sensory Nerve Conduction Studies

Clinical development

Our clinical development plan is to start with trials in early infantile Krabbe disease, and if successful, consider further exploration of expansion of the indication with trials in later onset forms of Krabbe disease.

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We believe gene replacement with PBKR03 could significantly reduce the accumulation of galactolipids such as galactocerebroside that often leads to demyleniation in both the CNS and PNS, or reduction in toxic glycosphingolipids of psychosine reversing neuronal toxicity, resulting in meaningful clinical benefit to patients. We will measure clinical benefit by prevention of further developmental regression and by restoration of developmental trajectories, as measured by developmental milestones using accepted clinical scales, observer-reported outcomes and video recordings.

We have an active IND for PBKR03, and plan to initiate patient enrollment of a multi-center, open-label, single-arm Phase 1/2 dose-escalation clinical trial of PBKR03 in patients with a diagnosis of early infantile Krabbe disease GALC mutations and reduced enzyme activity beginning in the United States in the first half of 2021. We intend this trial to have two independent dose escalation cohorts (three subjects per dose) based on age at enrolment: dosing initially in subjects > 4 and < 9 months of age, with dose escalation and initiation of dosing in subjects > 1 and < 4 months of age gated by safety in cohort 1. Planned starting doses for each cohort will exceed the MED in the twitcher mouse model, with planned escalation to a 3-fold higher dose, followed by a third confirmatory cohort. We expect to report initial 30-day safety and biomarker data from the first cohort in late 2021 or early 2022.

The primary endpoint of the trial is to assess safety and tolerability over 60 months. Secondary endpoints are to assess change from baseline to 24 months on biomarkers, (including CSF and plasma GALC activity and psychosine, and biomarkers of disease progression), and on clinical outcomes (as assessed using by the Bayley Scale of Infant and Toddler Development, and other developmental scales). Interim analyses are planned for certain biomarkers starting at one month post dosing. All subjects will be evaluated over two years for safety and efficacy, followed by an additional 36 months of long-term follow up.

We have also received feedback from the EMA regarding our preclinical studies and proposed clinical trial.

In collaboration with Penn’s ODC, we are also currently planning to develop comparator data sets for our Krabbe clinical trial. Clinical understanding of Krabbe disease has been summarized in several case studies and natural history studies.

Based on the results from this Phase 1/2 trial, we plan to obtain input from regulatory agencies on the requirements to submit for regulatory approval for commercialization in the United States and internationally.

Regulatory Designations

In October 2020, the FDA granted ODD and RPDD to PBKR03 for the treatment of Krabbe disease. We believe these designations represent an important recognition of the dire need for an effective treatment option for those suffering from Krabbe. The ODD grants us financial incentives to support clinical development and the potential for up to seven years of market exclusivity in the United States upon regulatory approval, while under the RPDD program, a sponsor who receives approval for a drug or biologic for a “rare pediatric disease” may qualify for a priority review voucher that may be sold or transferred.In February 2021, we received a positive opinion from the EMA for our orphan drug designation application for PBKR03 for the treatment of Krabbe disease.

Clinical Trial Approvals

In February 2021, the FDA notified us that our IND for PBKR03 was cleared, which allows us to proceed with our clinical trial.

We have manufactured the PBKR03 clinical supply to support clinical trial initiation in the United States.

Trigeminal Ganglia and Dorsal Root Ganglia Toxicity

The primary finding of the NHP toxicology studies for each of PBGM01, PBFT02 and PBKR03 was TRG and DRG toxicity with consequent peripheral and spinal cord axonopathy. These findings have been previously reported as an AAV platform risk based on NHP studies in which minimal to mild DRG toxicity was observed within 14 to 30 days after dosing, without clinical manifestations. Chronic studies examining DRG toxicity have revealed no increase in severity and no clinical manifestations at four to six months or up to four years after

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administration. Similarly, no clinical manifestations were observed in any animals on detailed neurological examinations or daily observations in the PBGM01 and PBFT02 toxicology studies.

We believe the asymptomatic sensory neuron findings observed in NHPs treated with AAV vectors via the ICM route likely represent a universal DRG pathology in NHPs administered AAV gene therapy. Published data have shown that the administration of AAV vectors to NHPs via the blood or CSF can lead to damage of dorsal root ganglia and their associated axons. Similar findings were observed following IV administration of an engineered variant of AAV9. More recently, a meta-analysis of 33 non-clinical studies in 256 NHPs evaluated the severity of DRG pathology for five different capsids, five different promoters, and 20 different transgenes (including an AAV9 vector expressing antibodies 170 days after ICM administration), while also comparing different ROAs, doses, time courses, study conduct, animal age, and sex. This meta-analysis showed that mostly minimal to moderate asymptomatic DRG pathology characterized by mononuclear cell infiltrates, neuronal degeneration, and secondary axonopathy of central and peripheral axons were observed for all capsids and promoters tested, including 83% of NHPs administered AAV intrathecally and 32% of NHPs administered AAV intravenously. DRG pathology was absent prior to 14 days post administration, was similar from 1-5 months post-injection, and was less severe after 6 months. The transgene appeared to have the greatest impact on the severity of the sensory neuron pathology, suggesting that transgene overexpression drives the early events leading to neuronal degeneration. Higher AAV doses correlated with increased severity. Younger NHPs (infants and juveniles) appeared to exhibit less severe pathology compared to adult NHPs. Animal sex and vector purification method had no impact. Sensory nerve conduction studies detected abnormalities in a minority of animals correlating with a greater severity of peripheral nerve axonopathy. For most studies, it was not possible to identify a no-observed-adverse-effect-level above the MED. To date, the NHP studies examining DRG toxicity have revealed no clinical manifestations at four to six months or up to four years after administration.

To better understand the clinical significance of these findings, we plan to implement clinical monitoring in our GM1, FTD and Krabbe disease interventional trials, consisting of both nerve conduction studies and neurological exams focused on sensory and peripheral nerve function.

The GTP has recently published data on certain technology regarding MicroRNA-mediated inhibition of transgene expression reduces DRG toxicity by AAV vectors. We plan to work with Penn to evaluate the appropriateness of incorporating this technology into our research programs, but do not expect to incorporate this early-stage technology into our current lead clinical programs for GM1, FTD or Krabbe. We have access to this technology as part of our collaboration with GTP, whereby we have access to novel capsids, toxicity reduction technologies and delivery and formulation improvements.

Research Programs

We also have four programs in the discovery, candidate selection or IND-enabling stage, PBML04 for MLD, PBAL05 for ALS, PBCM06 for CMT2A and an undisclosed program to treat an adult CNS indication. MLD is a monogenic autosomal recessive sphingolipid storage disease caused by mutations in the gene encoding the lysosomal enzyme ARSA. We have initiated IND-enabling studies for PBML04. Patients with MLD display progressive leukodystrophy (demyelination) in the CNS and PNS, neuronal cell death, and subsequent loss of all motor and cognitive function, resulting in premature death, especially in patients with early disease onset. PBAL05 is targeting ALS patients who have a gain-of-function mutation in the C9orf72 gene. ALS is a motor neuron disease characterized by rapid degeneration of upper and lower motor neurons, leading to progressive weakness and premature death. Most cases of ALS are sporadic with an unknown etiology, but there are also genetic forms of the disease inherited in an autosomal dominant fashion. Mutations in the C9orf72 gene are the most common genetic defects implicated in ALS, accounting for approximately 34% of familial ALS cases and approximately 5% of sporadic ALS cases. Mitofusin 2, or MFN2, gene mutations are associated with CMT2A, which is a neurological disorder that presents complex phenotypes, including not only neuropathy-related features but also systemic impairment of the CNS. CMT2A is the most frequent axonal form of CMT, accounting for approximately 20% of the diagnosed cases. Clinically, the classic form of CMT2A is characterized by physical weakness, foot deformities, difficulty in walking and areflexia. We are coordinating with GTP in conducting discovery stage preclinical studies for these programs. Beyond this portfolio, through our research collaboration with GTP, we also have the option to license programs for ten additional indications, along with rights and

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licenses to new gene therapy technologies developed by Penn, such as novel capsids, toxicity reduction technologies and delivery and formulation.

Manufacturing

Gene therapy manufacturing is a critical factor in the successful development and commercialization of novel genetic medicines, and to that end, we have established a relationship with Catalent, a contract development and manufacturing organization, or CDMO, for our initial manufacturing needs.

Our gene therapy manufacturing strategy utilizes a production platform approach with HEK293 mammalian cells as the substrate, triple plasmid transient transfection and single-use fixed-bed iCellis® bioreactor system for the manufacture of our AAV product candidates. We are using a well-characterized production platform that has been used for both commercial and clinical AAV products and product candidates. We believe our approach will enable rapid development, control of product quality and regulatory compliance. Catalent has extensive experience with the iCellis® bioreactor platform and HEK293 transient transfection gene therapy manufacturing. As part of our research collaboration with GTP, we have access to broad and deep early-stage process science capabilities and experience to enable technology transfer of scalable processes to our CDMO, and state-of-the art analytical capabilities for product quality testing and analytical characterization. GTP currently provides us with the preclinical and toxicology research-grade vector supplies, while Catalent provides us with the cGMP AAV clinical supplies for our clinical trials, following a technology transfer process from Penn to Catalent. The production process for all three of our lead candidates has been scaled up to GMP standards at Catalent’s facility and clinical materials for all three lead product candidates have been or are being manufactured.

We have a collaboration agreement with Catalent, or the Catalent Collaboration Agreement. As part of the Catalent Collaboration Agreement, we paid Catalent an upfront fee for the commissioning, qualification, validation and equipping of a clean room suite. Subject to validation of the clean room suite, which was completed in the fourth quarter of 2020, we will pay an annual fee for five years for the use of the clean room suite. We initiated cGMP manufacturing in the dedicated suite, giving us the ability to meet production requirements for our current lead product candidates through clinical studies and early commercialization. We believe that our platform manufacturing approach along with the dedicated manufacturing capabilities and capacity provide a core strategic advantage and positions us to be a leading drug development company to address rare, monogenic CNS disorders.

In April 2020, we entered into a development services and clinical supply agreement, or the Manufacturing and Supply Agreement, with Catalent to secure clinical scale manufacturing capacity for batches of active pharmaceutical ingredients for our gene therapy product candidates. The Manufacturing and Supply Agreement provides for a term of five years which period may be extended once, at our option, for an additional five year-period. In consideration for the use of the clean room suite, in addition to our annual fee, we have agreed to a minimum amount of purchase commitments for each year in the term, subject to adjustments for inflation.

In December 2020, we entered into a lease to support chemistry, manufacturing and controls laboratory operations for our gene therapy programs. This new laboratory is slated to open in the second quarter of 2021 and will initially focus on state-of-the-art analytical capabilities, clinical assay development and validation, biomarker assay validation and clinical product testing to support both viral vector manufacturing and clinical development.

We believe that our manufacturing capabilities provide us with the advantages of better control of drug development timelines, improved control of vector supply for a portfolio of clinical assets and improved control of product quality through the improvements of the manufacturing platform.

We expect to establish our own manufacturing facility for long-term commercial market supply. As the research and development pipeline advances and grows, we intend to pursue internal manufacturing capacity build out as needed.

We also anticipate that we will continue to make significant investments to further optimize our manufacturing capabilities to produce high-quality, cost-effective AAV vectors and we will continue to make investments in process and analytical sciences, internally or with third parties, to evaluate and develop manufacturing process improvements that may increase the productivity and efficiency of our manufacturing platform processes.

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Competition

The biotechnology and pharmaceutical industries, including the genetic medicines field, are characterized by rapidly changing technologies, competition and a strong emphasis on intellectual property. We are aware of several companies focused on developing gene therapies in various indications as well as several companies addressing methods for modifying genes and regulating gene expression. We may also face competition from large and specialty pharmaceutical and biotechnology companies, academic research institutions, government agencies and public and private research institutions with genetic medicine and other therapeutic approaches.

We consider our most direct competitors with respect to PBGM01 for the treatment of GM1 to be Sio Gene Therapies, Inc., which began its clinical trial for a gene therapy treatment for early and late infantile and juvenile GM1 in August 2019, and Lysogene, S.A., has received MHRA and Research Ethics Committee approvals in the United Kingdom in January 2021 and received IND clearance from FDA in February 2021 to start a Phase 1 clinical trial for a gene therapy treatment for GM1.

We consider our most direct competitors with respect to PBFT02 for the treatment of FTD-GRN to be Alector, Inc., which is conducting a Phase 2 clinical trial for immune-neurology treatment for FTD-GRN, and Prevail Therapeutics Inc., which was acquired by Eli Lilly and Company in January 2021, has initiated a Phase 1/2 clinical trial for a gene therapy treatment for FTD-GRN. Alkermes plc and Arkuda Therapeutics, Inc. are conducting preclinical research using small molecule approaches to treat FTD-GRN patients. Denali Therapeutics has a preclinical recombinant progranulin protein under evaluation in addition to their oral EIF2a modulator in a Phase 1 clinical trial. We are also aware of other therapeutic approaches in preclinical development that may target FTD-GRN patients.

Recently Forge Biologics announced that FDA granted IND clearance for a Krabbe gene therapy candidate that combines bone marrow transplant and gene therapy. There is some evidence that human stem cell transplant is beneficial for pre-symptomatic infants with Krabbe disease.There is some evidence that hematopoetic stem cell transplant is beneficial for pre-symptomatic infants with Krabbe disease, and it has become standard of care in many sites in the US. We are also aware of other therapeutic approaches in preclinical development and an ongoing natural history study being conducted by the Children’s Hospital of Pittsburgh and certain academic studies for Krabbe disease.

Many of our potential competitors, alone or with their strategic partners, have substantially greater financial, technical and other resources than we do, such as larger research and development, clinical, marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of competitors. Our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any product candidates that we may develop. Competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market, if ever. Additionally, new or advanced technologies developed by our competitors may render our current or future product candidates uneconomical or obsolete, and we may not be successful in marketing our product candidates against competitors.

License Agreement

University of Pennsylvania

In May 2020, we entered into an amended and restated research, collaboration and licensing agreement, or the Penn Agreement, with The Trustees of the University of Pennsylvania, or Penn, for research and development collaborations and exclusive license rights to patents for certain products and technologies, which superseded the sponsored research, collaboration and licensing agreement we entered into with Penn in September 2018. Under the Penn Agreement, Penn granted us an exclusive, worldwide license, with the right to sublicense, under certain patent rights controlled by Penn (i) as of the effective date or (ii) arising out of the conduct of research funded by us, in each case to develop and commercialize licensed products for specific rare monogenic central nervous system, or CNS, indications. Penn also granted us a non-exclusive, worldwide license, with the right to sublicense in connection with the foregoing patent rights or a licensed product, under certain Penn know-how and materials

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necessary or reasonably useful to develop and commercialize such licensed products. The Penn license grant covers up to 17 specific rare monogenic CNS indications. Programs for the indications must be selected by May 2025. In addition, upon written notification by us and provided Penn has the right to do so, the Penn license grant automatically includes: (i) one or more additional indication(s) that may be treatable by the same licensed product if such indications are in the rare monogenic CNS field, and (ii) provided certain conditions are met, one or more additional indication(s) outside the rare monogenic CNS field for a specific licensed product.

As part of our collaboration with Penn, we also agreed to fund certain research in the laboratory of Dr. James Wilson, or the Wilson Laboratory, relating to preclinical development of selected product candidates, with the goal of identifying and preclinically developing up to 17 product candidates for further clinical development and commercialization by us. We are also obligated to pay $5.0 million per year to fund discovery research in the Wilson Laboratory through May 2025.

Our initial collaboration was for five rare monogenic CNS indications with options for seven additional rare monogenic CNS indications. Following the amendment in May 2020, and subsequent to our recent option exercise, our collaboration includes seven active programs for rare monogenic CNS indications and we have the option, until May 2025, to collaborate with Penn and the Wilson Laboratory on up to ten additional rare monogenic CNS indications, in each case upon payment of an option fee in the low seven figures.Further, through May 2025, Penn has agreed to notify us of any new technologies discovered, developed or engineered by the Wilson Laboratory as part of its discovery program, such as novel capsids, toxicity reduction technologies and delivery and formulation. We may add intellectual property covering any such new technology to the Penn license grant for any given indication that is within the collaboration.

In addition, Penn will notify us of any patented manufacturing methods developed by the Wilson Laboratory during the specified research term, and we have the option to obtain a non-exclusive license under those patent rights controlled by Penn for our licensed products.

On an indication-by-indication basis, Penn has agreed to ensure that the Wilson Laboratory will not collaborate with any commercial third party to develop another gene therapy product for the same indication during, or for one year following, its work for us on a given indication and licensed product. Under the licensed Penn patent rights, Penn retains the right to conduct (and to authorize non-commercial third parties to conduct) certain educational, research, clinical and patient care activities.

As consideration for the licensed rights, we issued Penn 839,130 shares of our common stock in 2018. We also paid Penn a one-time license issuance fee of $2.5 million, and have agreed to pay Penn an annual license maintenance fee in the low six figures, which annual fee is creditable against royalties following the first commercial sale of a licensed product. In addition, for each licensed product, we are obligated to pay Penn up to $16.5 million in aggregate development milestone payments upon the achievement of specific development milestone events by such licensed product for a first indication, and reduced milestone payments for the second and third indications. We are also obligated to pay Penn, on a licensed product-by-licensed product basis, up to $55.0 million in aggregate commercial milestone payments. We have also agreed to pay Penn, on a licensed product-by-licensed product and country-by-country basis during the royalty period, tiered royalties (subject to customary reductions) in the mid-single digits on annual worldwide net sales of such licensed product. On a licensed product-by-licensed product and country-by-country basis, the royalty period is from the date of first commercial sale of such licensed product in a country until the latest of (i) the expiration of the last valid claim within the licensed patent rights covering such licensed product in the country in which such licensed product is made, used or sold, (ii) the expiration of the data exclusivity term conferred by the applicable regulatory authority in such country with respect to such licensed product, and (iii) the tenth anniversary of the first commercial sale of such licensed product in such country. In addition, we have agreed to pay Penn a percentage of sublicensing income, ranging from the mid-single digits to low double digits, for sublicenses of our rights under the Penn Agreement. If we add a new program to the collaboration, the foregoing milestone, royalty and sublicensing income payments may be increased depending on when the program is added.

Under the Penn Agreement, we are obligated to use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize at least one licensed product for each of the licensed indications for prophylactic, diagnostic and therapeutic uses in humans. We may satisfy this obligation by achieving, for each

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licensed product, certain diligence events by a specified achievement date, which dates may be extended under certain circumstances. Pursuant to the agreement, Penn will be responsible for preclinical development activities, including all IND-enabling non-clinical studies and research grade manufacturing, and other collaborative activities set forth in the plan for the funded research, and we will be responsible for regulatory strategy and operations, clinical development, GMP manufacture and commercialization of all licensed products.

The agreement will expire on a licensed product-by-licensed product and country-by-country basis upon the later of (i) the expiration of the last valid claim of the licensed patent rights that covers the exploitation of such licensed product in such country, and (ii) the expiration of the royalty period. At any time after May 2025, we may terminate the agreement in its entirety, or for a licensed product, for convenience upon 90 days’ prior written notice to Penn. Penn may terminate the agreement on an indication-by-indication basis if we fail to meet any diligence event and fail to timely cure such breach, or the agreement in its entirety if we fail to pay the research funding, fail to comply with applicable laws, grant a security interest in any of the licensed patent rights, fail to achieve certain financing obligations, or make certain challenges to the licensed patent rights. Either party may terminate the agreement for the other party’s insolvency or material breach that is not cured within a specified period of time.

Intellectual Property

Our commercial success depends in part on our ability to obtain and maintain proprietary and/or intellectual property protection in the United States and other countries for our current product candidates and future products, as well as our core technologies, including our manufacturing know-how. We strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to the development of our business by seeking, maintaining and defending our intellectual property, whether developed internally or licensed from third parties. We also rely on trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of gene therapy. Additionally, we intend to rely on regulatory protection afforded through rare drug designations, data exclusivity and market exclusivity as well as patent term extensions, where available.

Currently, our patent protection consists of patent applications that we have in-licensed from Penn under the Penn Agreement for our product candidates in our licensed indications. The in-licensed patent applications are directed to new AAV capsids and certain defined variants, to recombinant AAV viruses, or rAAVs, capable of delivering certain genes into human cells to treat monogenic diseases of the CNS, to methods of treating those monogenic diseases with rAAV, as well as certain aspects of our manufacturing capabilities and related technologies. Our in-licensed patent portfolio currently includes:

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The term of individual patents may vary based on the countries in which they are obtained. Generally, patents issued from applications filed in the United States are effective for 20 years from the earliest effective non-provisional filing date. In addition, in certain instances, a patent term can be extended to recapture a portion of the term effectively lost as a result of FDA regulatory review period. The restoration period cannot be longer than five years and the total patent term, including the restoration period, must not exceed 14 years following FDA approval. The duration of patents outside of the United States varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective national filing date.

In addition to patents and patent applications that we license, we rely on trade secrets and know-how to develop and maintain our competitive position. For example, significant aspects of our AAV manufacturing capabilities and gene therapy technology are based upon trade secrets and know-how. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, and obtain and maintain control and/or ownership of certain technologies, in part, through confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and commercial partners. We also seek to preserve the integrity and confidentiality of our data, trade secrets and know-how, including by implementing measures intended to maintain the physical security of our premises and the physical and electronic security of our information technology systems.

Our ability to stop third parties from making, using, selling, offering to sell or importing our products may depend on the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities. With respect to our licensed intellectual property, we cannot be sure that patents will issue with respect to any of the pending patent applications to which we license rights or with respect to any patent applications that we or our licensors may file in the future, nor can we be sure that any of our licensed patents or any patents that may be issued in the future to us or our licensors will be commercially useful in protecting our product candidates and methods of manufacturing the same. Moreover, we may be unable to obtain patent protection for certain of our product candidates generally, as well as with respect to certain indications. See the section entitled “Risk Factors—Risks Related to Our Intellectual Property” for a more comprehensive description of risks related to our intellectual property.

Government Regulation and Product Approval

Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, extensively regulate, among other things, the research, development, testing, manufacture, quality

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control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.

FDA Approval Process

In the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, or the FDC Act, and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products. Biological products used for the prevention, treatment, or cure of a disease or condition of a human being are subject to regulation under the FDC Act, except the section of the FDC Act which governs the approval of New Drug Applications, or NDAs. Biological products, such as gene therapy products, are approved for marketing under provisions of the Public Health Service Act, or PHSA, via a Biologics License Application, or BLA. However, the application process and requirements for approval of BLAs are very similar to those for NDAs. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as clinical hold, FDA refusal to approve pending NDAs or BLAs, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.

Biological product development for a new product or certain changes to an approved product in the United States typically involves preclinical laboratory and animal tests, the submission to the FDA of an IND which must become effective before clinical testing may commence, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication for which FDA approval is sought. Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease.

Preclinical tests include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product. The conduct of the preclinical

tests must comply with federal regulations and requirements, including Good Laboratory Practices. The results of preclinical testing are submitted to the FDA as part of an IND along with other information, including information about product chemistry, manufacturing and controls, and a proposed clinical trial protocol. Long-term preclinical tests, such as tests of reproductive toxicity and carcinogenicity in animals, may continue after the IND is submitted. A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has neither commented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin. Clinical trials involve the administration of the investigational biologic to healthy volunteers or patients under the supervision of a qualified investigator. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with Good Clinical Practice, or GCP, an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators, and monitors; as well as (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as part of the IND.

The FDA may order the temporary or permanent discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA regulations or presents an unacceptable risk to the clinical trial patients. The trial protocol and informed consent information for patients in clinical trials must also be submitted to an institutional review board, or IRB, for approval. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements, or may impose other conditions if it believes that the patients are subject to unacceptable risk.

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Clinical trials to support BLAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1, the initial introduction of the biologic into patients, the product is tested to assess safety, dosage tolerance, metabolism, pharmacokinetics, pharmacological actions, side effects associated with drug exposure, and to obtain early evidence of a treatment effect if possible. Phase 2 usually involves trials in a limited patient population to determine the effectiveness of the drug or biologic for a particular indication, determine optimal dose and regimen, and to identify common adverse effects and safety risks. If a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtain additional information about clinical effects and confirm efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug or biologic and to provide adequate information for the labeling of the product. In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the safety and efficacy of the drug or biologic. In rare instances, including instances of gene therapies intended for rare diseases, a single Phase 3 trial with other confirmatory evidence may be sufficient where there is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible.

In addition, the manufacturer of an investigational drug in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for expanded access to such investigational drug.

After completion of the required clinical testing, a BLA is prepared and submitted to the FDA. FDA approval of the BLA is required before marketing and distribution of the product may begin in the United States. The BLA must include the results of all preclinical, clinical, and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture, and controls. The cost of preparing and submitting a BLA is substantial. The submission of most BLAs is additionally subject to a substantial application user fee. Under an approved BLA, the applicant is also subject to an annual program fee. These fees typically increase annually. A BLA for a drug that has been designated as an orphan drug is not subject to an application fee, unless the BLA includes an indication for other than a rare disease or condition. The FDA has 60 days from its receipt of a BLA to determine whether the application will be accepted for filing based on the Agency’s determination that it is adequately organized and sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals to complete the review of BLAs. Most applications are classified as Standard Review products that are reviewed within ten months of the date the FDA accepts the BLA for filing; applications classified as Priority Review are reviewed within six months of the date the FDA accepts the BLA for filing. A BLA can be classified for Priority Review when the FDA determines the biologic product has the potential to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectiveness compared to available therapies. The review process for both standard and priority reviews may be extended by the FDA for three or more additional months to consider certain late-submitted information, or information intended to clarify information already provided in the BLA submission.

The FDA may also refer applications for novel biologic products, or biologic products that present difficult questions of safety or efficacy, to be reviewed by an advisory committee—typically a panel that includes clinicians, statisticians and other experts—for review, evaluation, and a recommendation as to whether the BLA should be approved. The FDA is not bound by the recommendation of an advisory committee, but generally follows such recommendations. Before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the biologic product is manufactured. The FDA will not approve the product unless compliance with cGMP is satisfactory and the BLA contains data that provide substantial evidence that the biologic is safe, pure, potent and effective in the claimed indication.

After the FDA evaluates the BLA and completes any clinical and manufacturing site inspections, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies in the BLA submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application for approval. If, or when, those deficiencies have been addressed to the FDA’s

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satisfaction in a resubmission of the BLA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. An approval letter authorizes commercial marketing and distribution of the biologic with specific prescribing information for specific indications. As a condition of BLA approval, the FDA may require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the biologic outweigh the potential risks to patients. A REMS can include medication guides, communication plans for healthcare professionals, and elements to assure a product’s safe use, or ETASU. An ETASU can include, but is not limited to, special training or certification for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring, and the use of patient-specific registries. The requirement for a REMS can materially affect the potential market and profitability of the product. Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the product’s safety or efficacy.

Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing. Changes to some of the conditions established in an approved BLA, including changes in indications, product labeling, manufacturing processes or facilities, require submission and FDA approval of a new BLA or BLA supplement before the change can be implemented. A BLA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing BLA supplements as it does in reviewing BLAs.

Additional Standard for Gene Therapy Products

In addition to the regulations discussed above, there are a number of additional standards that apply to clinical trials involving the use of gene therapy. FDA has issued various guidance documents regarding gene therapies, which outline additional factors that FDA will consider at each of the above stages of development and relate to, among other things: the proper preclinical assessment of gene therapies; the CMC information that should be included in an IND application; the proper design of tests to measure product potency in support of an IND or BLA application; and measures to observe delayed adverse effects in subjects who have been exposed to investigational gene therapies when the risk of such effects is high. For instance, FDA usually recommends that sponsors observe all surviving subjects who receive treatment using gene therapies that are based on adeno-associated virus vectors in clinical trials for potential gene therapy-related delayed adverse events for a minimum 5-year period, followed by 10 years of annual queries, either in person or by questionnaire. FDA does not require the long-term tracking to be complete prior to its review of the BLA.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan drug designation to biological products intended to treat a rare disease or condition—generally a disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals in the United States, there is no reasonable expectation that the cost of developing and making a product available in the United States for such disease or condition will be recovered from sales of the product. Orphan drug designation must be requested before submitting a BLA. After the FDA grants orphan drug designation, the identity of the biological product and its potential orphan disease use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process. The first BLA applicant to receive FDA approval for a particular active moiety to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketing period in the United States for that product in the approved indication. For large molecule drugs, including gene therapies, sameness is determined based on the principal molecular structural features of a product. As applied to gene therapies, the FDA has recently issued draft guidance in which it stated it would consider certain key features, such as the transgenes expressed by the gene therapy and the vectors used to deliver the transgene, to be principal molecular structural features. With regard to vectors, the FDA intends to consider whether two vectors from the same viral class are the same or different on a case-by-case basis. The FDA does not intend to consider minor differences between transgenes and vectors to be different principal molecular structural features. The FDA also intends to consider whether additional features of the final gene therapy product, such as regulatory elements and the cell type that is transduced (for genetically modified cells), should also be considered to be principal molecular structural features. During the seven-year marketing exclusivity period, the FDA may not approve any other applications to market a biological product containing the same principal molecular structural features for the same indication,

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except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity. A product can be considered clinically superior if it is safer, more effective or makes a major contribution to patient care. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biological product for the same disease or condition, or the same biological product for a different disease or condition. Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA user fee.

Rare Pediatric Disease Priority Review Voucher Program

Under the Rare Pediatric Disease Priority Review Voucher program, FDA may award a priority review voucher to the sponsor of an approved marketing application for a product that treats or prevents a rare pediatric disease. The voucher entitles the sponsor to priority review of one subsequent marketing application. A voucher may be awarded only for an approved rare pediatric disease product application. A rare pediatric disease product application is an NDA or BLA for a product that treats or prevents a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years; in general, the disease must affect fewer than 200,000 such individuals in the U.S.; the NDA or BLA must be deemed eligible for priority review; the NDA or BLA must not seek approval for a different adult indication (i.e., for a different disease/condition); the product must not contain an active ingredient that has been previously approved by FDA; and the NDA or BLA must rely on clinical data derived from studies examining a pediatric population such that the approved product can be adequately labeled for the pediatric population. Before NDA or BLA approval, FDA may designate a product in development as a product for a rare pediatric disease.

To receive a rare pediatric disease priority review voucher, a sponsor must notify FDA, upon submission of the NDA or BLA, of its intent to request a voucher. If FDA determines that the NDA or BLA is a rare pediatric disease product application, and if the NDA or BLA is approved, FDA will award the sponsor of the NDA or BLA a voucher upon approval of the NDA or BLA. FDA may revoke a rare pediatric disease priority review voucher if the product for which it was awarded is not marketed in the U.S. within 365 days of the product’s approval. The voucher, which is transferable to another sponsor, may be submitted with a subsequent NDA or BLA and entitles the holder to priority review of the accompanying NDA or BLA. The sponsor submitting the priority review voucher must notify FDA of its intent to submit the voucher with the NDA or BLA at least 90 days prior to submission of the NDA or BLA and must pay a priority review user fee in addition to any other required user fee. FDA must take action on an NDA or BLA under priority review within six months of receipt of the NDA or BLA.

On December 27, 2020, the Rare Pediatric Disease Priority Review Voucher program was reauthorized as part of the Consolidated Appropriations Act, 2021 allowing a product that is designated as a product for a rare pediatric disease prior to September 30, 2024 to be eligible to receive a rare pediatric disease priority review voucher upon approval of a qualifying NDA or BLA prior to September 30, 2026. It is unclear whether this program will continue to be reauthorized beyond the current sunset date in September 2024.

Fast Track Designation and Priority Review

FDA is required to facilitate the development, and expedite the review, of drugs that are intended for the treatment of a serious or life-threatening disease or condition for which there is no effective treatment and which demonstrate the potential to address unmet medical needs for the condition. Fast track designation may be granted for products that are intended to treat a serious or life-threatening disease or condition for which there is no effective treatment and preclinical or clinical data demonstrate the potential to address unmet medical needs for the condition. Fast track designation applies to both the product and the specific indication for which it is being studied. Any product submitted to FDA for marketing, including under a fast track program, may be eligible for other types of FDA programs intended to expedite development and review, such as priority review.

Priority review may be granted for products that are intended to treat a serious or life-threatening condition and, if approved, would provide a significant improvement in safety and effectiveness compared to available therapies. FDA will attempt to direct additional resources to the evaluation of an application designated for priority review in an effort to facilitate the review.

Breakthrough Therapy Designation

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The FDA is also required to expedite the development and review of biological products that are intended to treat a serious or life-threatening disease or condition where preliminary clinical evidence indicates that the biologic product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. The sponsor of a new biologic product candidate may request that the FDA designate the candidate for a specific indication as a Breakthrough Therapy concurrent with, or after, the filing of the IND for the biologic product candidate. The FDA must determine if the biological product qualifies for Breakthrough Therapy designation within 60 days of receipt of the sponsor’s request.

Regenerative Medicine Advanced Therapy (RMAT) Designation

The RMAT designation is an expedited program for the advancement and approval of regenerative medicine therapies that are intended to treat, modify, reverse, or cure a serious condition and where preliminary clinical evidence indicates the potential to address unmet medical needs for life-threatening diseases or conditions. Similar to Breakthrough Therapy designation, the RMAT allows companies developing regenerative medicine therapies to work earlier, more closely, and frequently with the FDA, and RMAT-designated products may be eligible for priority review and accelerated approval. Regenerative medicine therapies include cell therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, except for those regulated solely under section 361 of the PHS Act and Title 21 of the Code of Federal Regulations Part 1271. The FDA confirmed that gene therapies, including genetically modified cells, that lead to a sustained effect on cells or tissues may meet the definition of a regenerative medicine therapy. For product candidates that have received a RMAT designation, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. The timing of a sponsor’s request for designation and FDA response are the same as for the Breakthrough Therapy designation program.

Disclosure of Clinical Trial Information

Sponsors of clinical trials of FDA-regulated products, including biological products, are required to register and disclose certain clinical trial information on the website www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, trial sites and investigators, and other aspects of a clinical trial are then made public as part of the registration. Sponsors are also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of clinical trials can be delayed in certain circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly available information to gain knowledge regarding the progress of clinical development programs as well as clinical trial design.

Pediatric Information

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