mps iiia patients by the first quarter of 2018. lysogene ... · lysogene (lys.pa) initiation report...

Initiating CoverageApril 19, 2017

Lysogene (LYS.PA)Initiation Report

LifeSci Investment Abstract

Lysogene (Euronext Paris: LYS.PA) is a French biotechnology Company focused ondeveloping novel gene therapies for lysosomal storage disorders. The Company’s leadcandidate, LYS-SAF302, is an adeno-associated virus (AAV) capable of delivering a missinggene into patients with mucopolysaccharidosis type IIIA (MPS IIIA), an orphan indicationfor which there are no approved treatments. The Company recently went public throughan IPO on the Euronext Paris exchange and plans to initiate a pivotal Phase II/III trial inMPS IIIA patients by the first quarter of 2018. Lysogene is also pursing a treatment forGM1 gangliosidosis, another orphan indication, and may opt to leverage their platform andexpertise to move into additional rare CNS diseases.

Key Points of Discussion

■ Lysogene Plans to Initiate a Pivotal Study for MPS IIIA in the First Quarter of 2018.Lysogene’s lead program is a gene therapy for MPS IIIA, a lysosomal storage disorder withno approved therapies. Mucopolysaccharidosis type III is characterized by an inability tobreak down glycosaminoglycans (GAGs) in the lysosome due to an enzyme deficiency. Thetherapy uses an adeno-associated virus (AAV) to deliver the SGSH gene, which encodes themissing protein. The Company has demonstrated the safety and tolerability of the treatmentin a Phase I/II study and plans to launch a pivotal Phase II/III trial by the first quarterof 2018.

■ Developing Gene Therapies for Rare CNS Diseases. Lysogene intends to use its viralvector technology and expertise to address unmet needs in the treatment of lysosomalstorage disorders that have CNS involvement. The Company has chosen to first pursueMPS IIIA as well as GM1 gangliosidosis, but may expand their development pipeline intoother rare CNS diseases. The lack of approved therapies and potential for premium pricingin these orphan indications provide for an attractive market opportunity for the Company.

Expected Upcoming Milestones

■ Q4 2017 – IND submission for LYS-SAF302.■ Early 2018 – One-year data from natural history study for MPS IIIA.■ Q1 2018 – Launch of pivotal Phase II/III study for LYS-SAF302 in MPS IIIA.■ Q4 2018 – IND submission for LYS-GM101.■ Q1 2019 – Initiation of a Phase I/II study for LYS-GM101.■ Q1 2019 – Last patient enrolled into pivotal Phase II/III study for LYS-SAF302.■ Q2 2020 – Topline results from Phase II/III study for LYS-SAF302.■ Q3 2020 – Regulatory filings for LYS-SAF302 expected.

Analysts

David Sherman, Ph.D. (AC)(212) [email protected]

Market Data

Price $5.79Market Cap (M) $70EV (M) $42Shares Outstanding (M) 12.1Avg Daily Vol 2,09252-week Range: $5.78 - $8.01Cash (M) $28.9Net Cash/Share $2.33Annualized Cash Burn (M) $5.8Years of Cash Left >2.0Debt (M) $0.7

Financials

FY Dec 2014A 2015A 2016AEPS H1 NA NA NA

H2 NA NA NAFY (1.68)A (5.49)A NA

For analyst certification and disclosures please see page 33

▪ Lysogene Has Designed Pivotal Study Based on Feedback from US and EU Regulators. This pivotal Phase

II/III study is designed to evaluate the safety and efficacy of LYS-SAF302 in patients with MPS IIIA. The Company

has discussed this trial with US and EU regulators and it has been designed to satisfy the provided guidance. This

pivotal study will compare the disease progression of patients treated with LYS-SAF302 to a control cohort of patients

evaluated in the Company’s ongoing natural history study. The primary endpoint of this trial will be an assessment of

neurocognitive and motor development. Secondary endpoints are expected to include assessments of behavior, sleep,

quality of life, AEs, and MRI scans. The primary efficacy analysis will be conducted at 12 months with a secondary

efficacy analysis to follow at 24 months. Treated patients will be followed for a total of 5 years. Lysogene plans to

launch this study by the first quarter of 2018 and expects to enroll up to 20 patients. This could provide for a data

readout by the middle of 2020.

▪ Direct Delivery into the Brain May Be Critical. Lysogene has one primary competitor, Abeona Therapeutics

(NasdaqCM: ABEO), that is developing a competing AAV-based gene therapy to treat MPS IIIA. While the

companies have similar approaches, there are several key differences, particularly in terms of route of administration,

that may benefit Lysogene:

Direct Delivery into the Brain – Lysogene’s strategy involves the direct injection of an AAV encoding the

missing enzymes into the brain, compared with Abeona’s intravenous approach. Direct delivery is critical for

ensuring viral titers sufficient for strong transfection. Viral delivery using IV administration can be

problematic when trying to treat a CNS disorder, since viruses don’t readily cross the blood-brain barrier

(BBB). Abeona uses AAV9, which has an enhanced ability to cross the BBB. However, the doses required

for IV administration may increase the risk of systemic effects and other adverse events (AEs).

Potential for Off-Target Effects – Direct injection into the brain corrects the enzyme deficiency where the

toxicity occurs and minimizes the exposure of other cell types to the virus. In contrast, IV administration

exposes the whole body to the AAV. In the case of Abeona’s vector, AAV9 has broad tropisms for several

peripheral tissue types, including liver, heart, and skeletal muscle, in addition to neurons and glia.1 This

increases the likelihood of off-target effects or immune reactions. Since Abeona’s vector uses a non-specific

promoter, there would be transcription and translation of the SGSH gene in other peripheral tissues. While

IV administration is less invasive than intraparenchymal injection, it does also result in much broader viral

exposure in peripheral tissues.

Neutralizing Antibodies – AAV is a naturally-occurring virus, and up to 80% of humans have antibodies

against AAV serotype 2, 5, or 9.23 The presence of neutralizing antibodies can greatly reduce transduction

efficiency, since the immune system can clear out large quantities of virus. This is primarily an issue for IV

administration. Lysogene uses AAVrh10, an AAV serotype isolated from rhesus monkeys, which may be

more suitable for gene therapy due to the lack of endogenous anti-AAVrh10 antibodies found in humans.4

Proper Viral Titers – In their Phase I/II trial, Lysogene’s vector was delivered at a concentration of 7.21011

vg/mL, which is in the range of what is typically used for direct viral injections into the brain. Abeona is using

1 Inagaki, K, et al., 2006. Robust systemic transduction with AAV9 vectors in mice: efficient global cardiac gene transfer

superior to that of AAV8. Molecular Therapeutics, 14(1), pp45-53. 2 Boutin, S, et al., 2010. Prevalence of serum IgG and neutralizing factors against adeno-associated virus (AAV) types 1, 2, 5, 6,

8, and 9 in the healthy population: implications for gene therapy using AAV vectors. Human Gene Therapy, 21(6), pp704–712. 3 Haas, MJ, 2013. MPS IIIA: gene therapy for brain and body. SciBX, 6(28). 4 Gao, GP, et al., 2002. Novel adeno-associated viruses from rhesus monkeys as vectors for human gene therapy. Proceedings of

the National Academy of Sciences, 99, pp11854–11859.

April 19, 2017

a low dose of 51012 vg/kg and a high dose of 11013 vg/kg. Considering the dilution in the blood, the

presence of the BBB, and uptake by cells in peripheral organs, this may not be sufficient to induce high levels

of SGSH expression in the brain. Due to the broad tropism of AAV9, Abeona is very likely to have better

transduction efficiency of the liver and other organs compared to the brain. This poses a substantial risk to

this clinical program, because they must select a dosage that gets sufficient virus into the brain while not

causing toxicity in the liver or other organs.

▪ Lysogene is Conducting IND-Enabling Studies to Support Development in GM1 Gangliosidosis. LYS-

GM101 is an AAVrh10-based gene therapy to treat GM1 gangliosidosis by direct delivery of the gene encoding the

beta-galactosidase enzyme into the CNS. Lysogene has collaborative agreements with investigators from the University

of Massachusetts Medical School (UMMS) and Auburn University to conduct IND-enabling preclinical studies. The

Company expects to launch a Phase I/II study to evaluate the safety and efficacy of LYS-GM101. Lysogene has

received Orphan Drug designation of FDA and EMA and Rare Pediatric Disease designation form the FDA for LYS-

GM101.

Financial Discussion

Initial Public Offering. In February, Lysogene announced the completion of an initial public offering (IPO) on the

Euronext Paris exchange. The Company sold 3.3 million new shares priced at €6.80 ($7.31) per share, and the deal

raised a total of €22.6 million ($24.3 million) in net proceeds. Immediately following the IPO, Lysogene had a market

capitalization of roughly €82.1 million ($88.3 million).

April 19, 2017

Table of Contents

Company Description .................................................................................................................................................................... 5

LYS-SAF302: A Gene Therapy to Treat Mucopolysaccharidosis Type IIIA (MPA IIIA) ................................................. 5

Mechanism of Action ................................................................................................................................................................ 6

Comparison with Abeona Therapeutics’ Approach for MPSIIIA .................................................................................... 6

Preclinical Studies ...................................................................................................................................................................... 7

Safety Profile ............................................................................................................................................................................. 13

Mucopolysaccharidosis Type III ................................................................................................................................................ 13

Causes & Pathogenesis ........................................................................................................................................................... 14

Symptoms & Diagnosis .......................................................................................................................................................... 16

Treatment .................................................................................................................................................................................. 17

Disease Market Information ....................................................................................................................................................... 17

Epidemiology ............................................................................................................................................................................ 17

Market Size ................................................................................................................................................................................ 18

Pricing and Market Share Analysis ........................................................................................................................................ 18

Clinical Data Discussion .............................................................................................................................................................. 20

Planned Pivotal Phase II/III Trial ........................................................................................................................................ 24

Other Drugs in Development ..................................................................................................................................................... 24

LYS-GM101: A Gene Therapy to Treat GM1 Gangliosidosis ............................................................................................. 27

GM1 Gangliosidosis ..................................................................................................................................................................... 27

Causes & Pathogenesis ........................................................................................................................................................... 27

Symptoms & Diagnosis .......................................................................................................................................................... 28

Planned Clinical Program for LYS-GM101.............................................................................................................................. 29

Other Drugs in Development ..................................................................................................................................................... 29

Intellectual Property & Licensing ............................................................................................................................................... 30

Management Team ....................................................................................................................................................................... 30

Risk to an Investment .................................................................................................................................................................. 32

Analyst Certification ..................................................................................................................................................................... 33

Disclosures ..................................................................................................................................................................................... 33

April 19, 2017

Company Description

Lysogene is a French biotechnology Company that was founded in 2009 to harness the potential of gene therapy to

address unmet needs in the orphan disease space and, in particular, lysosomal storage disorders. The Company has

also established a US presence with the launching of a subsidiary in Cambridge, Massachusetts. Lysogene completed

an initial public offering (IPO) in February 2017, raising net proceeds of €22.6 million ($24.3 million). Lysogene’s lead

program is a gene therapy for mucopolysaccharidosis type IIIA (MPS IIIA), a lysosomal storage disorder with no

approved therapies. The therapy uses an adeno-associated virus (AAV) to deliver the SGSH gene, which encodes a

protein that these patients are missing. The Company has discussed plans for a pivotal Phase II/III study with US and

EU regulators and expects to launch this trial by the first quarter of 2018.

Lysogene is also currently conducting an observational natural history study in up to 25 patients, which will provide

additional data on the natural disease progression and will serve as a control group for the pivotal study. The

Company’s development pipeline is shown in Figure 1. Lysogene is also developing a gene therapy treatment, LYS-

GM101, for patients with GM1 gangliosidosis, and is currently conducting IND-enabling preclinical studies for this

candidate. There are no approved treatments for either indication that Lysogene is pursuing, and there is the potential

for premium pricing for these orphan indications. In addition, the Company can leverage their existing viral delivery

technology to pursue additional lysosomal storage disorders (LSD).

Figure 1. Lysogene’s Development Pipeline

Source: LifeSci Capital

LYS-SAF302: A Gene Therapy to Treat Mucopolysaccharidosis Type IIIA (MPA IIIA)

LYS-SAF302 is a second-generation product candidate that uses the adeno-associated virus vector serotype rh10

(AAVrh10) to deliver the SGSH gene into the CNS of patients with MPS IIIA. AAVrh10 is able to efficiently transfect

neurons and glia. LYS-SAF302 is a more potent form of the previous candidate, LYS-SAF301, that was developed in

response to the results obtained in the Phase I/II trial. LYS-SAF301 encoded two genes, which may have diminished

the transduction efficiency of the virus and the rate of protein expression.

April 19, 2017

Mechanism of Action. In MPS IIIA, there is a deficiency of the heparan-N-sulfatase enzyme. This enzyme is

responsible for the hydrolysis of the sulfate group attached to the glucosamine in heparan sulfate. The gene that

encodes heparan-N-sulfatase is SGSH. The catalytic site of the SGSH gene is activated by a sulfatase-modifying factor,

SUMF1.

By introducing the SGSH gene into individuals affected by MPS IIIA, there is the possibility to correct the deficiency

of the heparan-N-sulfatase enzyme. When this enzyme is present, the heparan sulfate breakdown process continues.

A decline in heparan sulfate build-up will slow neurological degeneration.

The SGSH gene can be delivered with a form of gene therapy using adeno-associated viruses (AAVs). AAVs are small

viruses (approximately 4.5 kilobases) with single-stranded DNA surrounded by non-enveloped capsids. To make the

complete AAV, the gene of interest is inserted into a plasmid as a transgene following a promoter. In the case of LYS-

SAF302, the promoter is the CAG promoter, a strong promoter capable of driving high levels of protein expression.

AAVs do not encode their own polymerases and therefore rely on the replication machinery in cells. The manufacture

of AAVs require two additional plasmids: a packaging plasmid containing the rep gene from AAV2 and cap gene from

AAVrh10, and a helper plasmid, which contains several other critical genes. The rep gene in AAVs recruits the cellular

machinery for translation. The cap gene encodes for structural proteins to make up the capsid. There are also segments

of the cDNA that code for the helping adenoviruses, which AAVs require. Once cells are transfected with these three

plasmids, the necessary genes are expressed and functional AAV particles are assembled.

A key advantage of using AAVs in gene therapy is the ability to infect post-mitotic cells, which lead to long-term gene

expression. When the AAV particles have been directly delivered to the central nervous system (CNS), they can infect

neurons and induce the expression of the missing enzyme. If sufficient expression of the protein is induced, the disease

progression may be slowed or even halted. Lysogene has developed an AAVrh10 virus that encodes the human SGSH

gene. To treat MPS IIIA, this viral vector is bilaterally injected directly into multiple sites in the brain to ensure broad

viral transfection and maximize the amount of enzyme that is translated and secreted.5

Comparison with Abeona Therapeutics’ Approach for MPSIIIA. Abeona Therapeutics is developing ABO-102,

an AAV9-based gene therapy, to treat MPS IIIA, taking a similar approach to Lysogene’s LYS-SAF302. Both ABO-

102 and LYS-SAF302 are AAVs that encode the SGSH gene. However, there are several important differences, most

important of which is in the route of administration, described below:

▪ Direct Delivery into the Brain – Lysogene’s strategy involves the direct injection of an AAV encoding the

missing enzymes into the brain. Direct delivery is critical for ensuring viral titers sufficient for strong

transfection. Viral delivery using intravenous administration can be problematic when trying to treat a CNS

disorder, since viruses don’t readily cross the blood-brain barrier (BBB). Abeona Therapeutics (NasdaqCM:

ABEO), Lysogene’s main competitor, uses this approach. However, they are using an AAV9, which has an

enhanced ability to cross the BBB. Higher local titers distributed over a larger region, the result of Lysogene’s

strategy, may induce greater overall protein expression than low titers across the entire brain. In addition, the

doses required for IV administration may increase the risk of systemic effects and other adverse events (AEs).

5 Tardieu M, Zerah M, Husson B, de Bournonville SP, Deiva K, Adamsbaum C, Vincent F, Hocquemiller M Broissand C,

Furlan V. 2014. Intracerebral administration of adeno-associated viral vector serotype rh. 10 carrying human SGSH and SUMF1

cDNAs in children with mucopolysaccharidosis type IIIA disease: results of a phase I/II trial. Hum Gene Ther 25:506-516.

April 19, 2017

▪ Potential for Off-Target Effects – Direct injection into the brain corrects the enzyme deficiency where the

toxicity occurs and minimizes the exposure of other cell types to the virus. In contrast, IV administration

exposes the whole body to the AAV. In the case of Abeona’s vector, AAV9 has broad tropisms for several

peripheral tissue types, including liver, heart, and skeletal muscle, in addition to neurons and glia,6 which

increases the likelihood of off-target effects or immune reactions. In addition, since Abeona’s vector uses a

non-specific promoter, there would be transcription and translation of the SGSH gene in other peripheral

tissues. While IV administration is less invasive than intraparenchymal injection, it does also result in much

broader viral exposure in peripheral tissues.

▪ Neutralizing Antibodies – AAV is a naturally-occurring virus, and up to 80% of humans have antibodies

against AAV serotype 2, 5, or 9.78 The presence of neutralizing antibodies can greatly reduce transduction

efficiency, since the immune system can clear out large quantities of virus. This is primarily an issue for IV

administration; neutralizing antibodies are less of a problem with intracerebroventricular or intraparenchymal

delivery. Lysogene uses AAVrh10, an AAV serotype isolated from rhesus monkeys, which may be more

suitable for gene therapy due to the lack of anti-AAVrh10 antibodies found in humans.9

▪ Correct Viral Titers – In their Phase I/II trial, Lysogene’s vector was delivered at a concentration of 7.21011

vg/mL, which is in the range of what is typically used for direct viral injections into the brain. Abeona is using

a low dose of 51012 vg/kg and a high dose of 11013 vg/kg. Considering the dilution in the blood, the

presence of the BBB, and uptake by cells in peripheral organs, this may not be sufficient to induce high levels

of SGSH expression in the brain. Due to the broad tropism of AAV9, Abeona is very likely to have better

transduction efficiency of the liver and other organs compared to the brain. This poses a substantial risk to

this clinical program, because they must select a dosage that gets sufficient virus into the brain while not

causing toxicity in the liver or other organs.

Preclinical Studies

MPS IIIA Mouse Model. An AAVrh10 vector, SAF301, was used to deliver the human SGSH and SUMF1 genes

to mice affected with MPS IIIA.10 In this experiment, 5-week-old mice received viral injections into the region labeled

L2 in Figure 2. Following this procedure, measures of SGSH expression, heparan sulfate storage, ganglioside

accumulation, and neuroinflammation were assessed at 12, 23 and 30 weeks of age.

6 Inagaki, K, et al., 2006. Robust systemic transduction with AAV9 vectors in mice: efficient global cardiac gene transfer

superior to that of AAV8. Molecular Therapeutics, 14(1), pp45-53. 7 Boutin, S, et al., 2010. Prevalence of serum IgG and neutralizing factors against adeno-associated virus (AAV) types 1, 2, 5, 6,

8, and 9 in the healthy population: implications for gene therapy using AAV vectors. Human Gene Therapy, 21(6), pp704–712. 8 Haas, MJ, 2013. MPS IIIA: gene therapy for brain and body. SciBX, 6(28). 9 Gao, GP, et al., 2002. Novel adeno-associated viruses from rhesus monkeys as vectors for human gene therapy. Proceedings of

the National Academy of Sciences, 99, pp11854–11859. 10 Winner Leanne K., Beard Helen, Hassiotis Sofia, Lau Adeline A., Luck Amanda J., Hopwood John J., and Hemsley Kim M.

2016. A preclinical study evaluating AAVrh10-based gene therapy for Sanfillipo syndrome. Human Gene Therapy. 27(5): 363-375

April 19, 2017

Figure 2. Injection Site of SAF301 into the Mouse Brain

Source: Winner, 2016

In mice affected with MPS IIIA and treated with SAF301, there was a mean 185-fold increase in SGSH compared to

control mice. At 30 weeks of age, mice were observed to have detectable SGSH levels at sites distant from the injection

site, including the L4, R2 and R4 regions, indicating broad spread of the enzyme. Figure 3 shows the relative levels

of a derivative of heparan sulfate, known as glucosamine-N-sulfate [α-1,4] hexuronic acid (GlcNS-UA). Injection of

SAF301 into L2 results in lower levels of GlcNS-UA, suggesting that this strategy of viral delivery may be able to

correct the underlying enzyme deficiency in MPS IIIA.

Figure 3. SGSH Concentrations in Various Brain Slices in Treated and Control Mice

Source: Winner et al., 2016 11

Figure 4 shows the quantities of GlcNS-UA remaining following treatment with SAF301. In the L2 region where the

injection was administered, the GlcNS-UA levels were 14% of that observed in control mice at 30 weeks. While the

reduction was less pronounced outside of the point of injection, there is a general downward trend for all areas,

11 Winner Leanne K., Beard Helen, Hassiotis Sofia, Lau Adeline A., Luck Amanda J., Hopwood John J., and Hemsley Kim M.

2016. A preclinical study evaluating AAVrh10-based gene therapy for Sanfillipo syndrome. Human Gene Therapy. 27(5): 363-

375

April 19, 2017

especially after 23 weeks of age, indicating that the virus spread a considerable distance from the original injection site.

The spread also increased with time.

Figure 4. Percentage of GlcNS-UA Remaining in SAF-301 Treated vs Control Mice

Source: Winner, 2016

Figure 5 illustrates the reduction in ganglioside accumulation in the rostral cortex between the treated and untreated

mice at 23 weeks. It is evident that the gene therapy strongly reduced ganglioside levels in the treated mice (panel G)

compared to untreated MPS IIIA mice (panel F), approximating levels observed in unaffected control mice (panel H).

Similar reductions were observed for mice at 30 weeks of age.

Figure 5. GM3 Ganglioside Staining in Ipsilateral Rostral Cortex at 23 Weeks

Source: Winner et al., 201612

AAVrh.10 was effective in treating a variety of neuropathologies in a mouse model of MPS IIIA, suggesting its

therapeutic potential in human patients with MPS IIIA. However, the results also suggest that using multiple sites of

injection may be essential to ensure sufficient coverage.

12 Winner Leanne K., Beard Helen, Hassiotis Sofia, Lau Adeline A., Luck Amanda J., Hopwood John J., and Hemsley Kim M.

2016. A preclinical study evaluating AAVrh10-based gene therapy for Sanfillipo syndrome. Human Gene Therapy. 27(5): 363-

375

April 19, 2017

AAV Delivery in MPS IIIA Mouse Model

AAV5 was used to deliver SUMF1 and SGSH directly into the central nervous system via an intraventricular injection

in newborn mice affected with MPSIIIA.13 Infection with GFP allowed for visualization of SGSH enzyme activity in

the mice. The importance of SUMF1 to SGSH activity was first established by comparing the effects of vectors either

encoding SGSH alone or together with SUMF1. Figure 6 shows how enzyme activity increases when SUMF1 is

encoded in the AAV vector. The results show that inclusion of SUMF1, connected with an internal ribosome entry

site (iRES) linker, more than doubles the amount of enzyme activity.

Figure 6. SGSH activity for MPS IIIA affected mice

Source: Fraldi, 200714

Behavioral tests also showed an improvement in activity levels following gene therapy. In Figure 7, hind-limb gait

was measured in MPSIIIA and control mice that either received an injection of SAF301 or a GFP-expressing vector

as a sham control. MPSIIIA mice treated with SAF301 (thin diagonal lines) had a significant improvement in gait

length and width relative to MPS IIIA mice receiving sham injections (black).

13 Fraldi, A., Hemsley, K., Crawley, A., et al. (2007). Functional correction of CNS lesions in an MPS-IIIA mouse model by

intracerebral AAV-mediated delivery of sulfamidase and SUMF1 genes. Hum. Mol. Genet. 16, 2693–2702. 14 Fraldi, A., Hemsley, K., Crawley, A., et al. (2007). Functional correction of CNS lesions in an MPS-IIIA mouse model by

intracerebral AAV-mediated delivery of sulfamidase and SUMF1 genes. Hum. Mol. Genet. 16, 2693–2702.

April 19, 2017

Figure 7. Gait Length and Width for MPSIIA and Normal Mice Receiving SAF301 or Sham Treatment

Source: Fraldi et al, 2007 15

Routes of Delivery for AAVrh10 into the CNS. Investigators evaluated the use of AAVrh10 to treat a lysosomal

storage disorder via a variety of routes of delivery. In these experiments, AAVrh10 carrying human cDNA was

delivered to primates.16 Five different routes of delivery were compared, including:

▪ Delivery into white matter.

▪ Delivery to deep gray matter and overlying white matter.

▪ Convection-enhanced delivery to deep gray matter.

▪ Intraventricular delivery to the lateral cerebral ventricles.

▪ Intraarterial delivery to the middle cerebral artery.

Figure 8 shows activity in the central nervous system following viral delivery of arylsulfatase A (ARSA) cDNA via

multiple routes of administration. The percentage of brain cubes with increased ARSA activity was highest for white

matter delivery. These results suggest that viral delivery into the white matter can achieve the highest transfection

efficiency.

15 Fraldi, A, et al., 2007. Functional correction of CNS lesions in an MPS-IIIA mouse model by intracerebral AAV-mediated

delivery of sulfamidase and SUMF1 genes. Human Molecular Genetics, 16(22), pp2693-2702. 16 Rosenberg JB, Sondhi D, Rubin DG, et al. 2014. Comparative Efficacy and Safety of Multiple Routes of Direct CNS

Administration of Adeno-Associated Virus Gene Transfer Vector Serotype rh.10 Expressing the Human Arylsulfatase A cDNA

to Nonhuman Primates. Human Gene Therapy Clinical Development. 25(3):164-177.

April 19, 2017

Figure 8. ARSA Activity Following Viral Delivery of ARSA cDNA via Several Routes of Administration

Source: Rosenberg et al., 2014

Preclinical Study on LYS-SAF302

Lysogene conducted a preclinical study evaluating the efficacy of their second-generation product, LYS-SAF302, in a

mouse model of MPS IIIA. LYS-SAF302 uses the CAG promoter, a strong constitutive promoter that may drive

higher levels of protein expression in transfected neurons. This version of the construct also eliminated the SUMF1

gene in order to maximize expression of the SGSH gene. In this preclinical study, LYS-SAF302 induced significantly

higher levels of SGSH enzyme activity and lower levels of heparan sulfate than the first-generation product, LYS-

SAF301 (also referred to as SAF301). These results are shown in Figure 9. The SGSH activity levels in mice treated

with LYS-SAF302 were not significantly different than wildtype mice, suggesting that the candidate was restoring

sufficient enzyme activity levels. These results suggest that the Company may see improved efficacy when they move

LYS-SAF302 into clinical development.

April 19, 2017

Figure 9. Evaluation of Efficacy of LYS-SAF302

SGSH Enzyme Activity Heparan sulfate Substrate

Source: Corporate Presentation

Safety Profile. To date, LYS-SAF301 has been safe and well-tolerated at the doses tested. In the Phase I/II study,

there were a total of 87 treatment-emergent adverse events. Of those, 5 were determined to be serious because their

treatment required a hospital visit. The 5 serious adverse events (SAEs) were gastroenteritis, head injury, viral lung

infection, transient bronchospasm at the induction of anesthesia, and acute viral infection. Diarrhea and upper

respiratory tract infections were the two most commonly reported AEs. Both, however, were also noted in patient

medical history before inclusion in the trial. Frequency of infectious events did not increase, and biological test results

showed stable and normal ranges. In addition, there were no signs of an immune response to either AAV or the SGSH

protein. The Company is currently conducting an open-label extension study, which is evaluating the long-term safety

and tolerability of LYS-SAF301. After 3 years of follow-up, there have been no serious adverse events related to the

study drug to date.

Mucopolysaccharidosis Type III

Mucopolysaccharidosis type III is a genetic disorder characterized by an inability to break down glycosaminoglycans

(GAGs) in the lysosome due to an enzyme deficiency. The subsequent build-up of glycosaminoglycans leads to

significant neurodegeneration and cognitive disability. There are four different types of MPS III, defined by which

enzyme is missing. A wide range of mutations can lead to the enzyme deficiency and the disease has a heterogeneous

presentation including a wide range of symptoms. Symptoms begin to appear in early childhood and the disease

progresses rapidly for the following 6-8 years. There are no approved treatments for MPS III, although several

therapies are currently under investigation in clinical trials.

April 19, 2017

Causes & Pathogenesis. MPS III has four different types (A, B, C, D), shown in Figure 10, each with a different

underlying mutated gene. All four mutated genes affect function of a specific enzyme involved in the breakdown of

GAGs.17

Figure 10. Types of MPS IIIA

MPS III Type Mutated gene Affected enzyme

A SGSH heparin N-sulfatase

B NAGLU alpha-N-acetylglucosaminidase

C HGSNAT acetyl-CoA-glucosaminide acetyltransferase

D GNS N-acetylglucosamine-6-sulfatase


GAGs, also known as mucopolysaccharides, are long unbranched sugar chains made up of a repeating disaccharide

units. The strong polarity of GAGs allow them to function as lubricants in joints. They are also involved in the

formation of bones, cartilage, skin and other tissues in the body. The specific GAG of interest in MPS III is heparan

sulfate.18

Heparan sulfate is a carbohydrate chain that contains sulfated residues. Heparan sulfates interact with various proteins

on the surface of the cell and in the extracellular matrix. While the function of heparan sulfates is not fully understood,

they are believed to play a role in growth factor signaling pathways. The degradation of heparan sulfate is carried out

by a series of enzymes and ends with the formation of heparan sulfate fragments and oligosaccharides.19 The enzymes

involved are three exoglycosidases, at least three sulfatases, and an acetyltransferase. Figure 11 outlines the degradation

process of heparan sulfate and the figure is labeled with which enzyme is deficient in each type of MPS III (A-D).

17 Valstar MJ, Ruijter GJ, van Diggelen OP, Poorthuis BJ, Wijburg FA (2008). Sanfilippo syndrome: A mini-review. J Inherit

Metab Dis. 31:240–52. 18 Fedele AO (2015). Sanfilippo syndrome: causes, consequences, and treatments. The Application of Clinical Genetics. 8:269-281. 19 Bame KJ (2001). Heparanases: endoglycosidases that degrade heparan sulfate proteoglycans. Glycobiology 11: 91R–98R.

April 19, 2017

Figure 11. Degradation of Heparan sulfate

Source: Wijburg et al., 200820

Heparan sulfate can’t be broken down if an individual has deficiencies in any of the four enzymes described above.

Instead, heparan sulfate will build-up in the lysosomes of cells, as shown in Figure 12. Lysosomes are cellular

compartments where molecules are digested and recycled. A build-up in the lysosome interferes with other proteins

and lysosomal functions. Decline in lysosomal functioning can affect the overall functioning and health of the cell.

20 Valstar MJ, Ruijter GJ, van Diggelen OP, Poorthuis BJ, Wijburg FA (2008). Sanfilippo syndrome: A mini-review. J Inherit

Metab Dis. 31:240–52.

April 19, 2017

Figure 12. Build-Up in Lysosomes Resulting from Enzyme Deficiency

Source: Pathology Outlines21

The link between accumulation of heparan sulfate and neurodegeneration in the CNS is not fully understood.

However, it is known that monosialic gangliosides build up in lysosomes following the build-up of heparan sulfate.

Ganglioside build-up occurs either through the inhibition ganglioside degradation enzymes or deregulated ganglioside

synthesis. The exact effect of build-up of heparan sulfate and gangliosides remains unclear.22

When a molecule cannot be broken down in the lysosomes, it builds up and can interfere with normal cellular

functioning. Animal model studies have suggested that both gangliosides and heparan sulfate build-up play a role in

the brain’s inflammatory response. When heparan sulfate is exocytosed from lysosomes and when ganglioside-filled

neurons are phagocytosed, the cell may elicit an immune response that can worsen damage to the CNS. Microglial

cells may become activated in response to the build-up, leading to the release of pro-inflammatory cytokines that can

contribute to neurodegeneration.23 Animal studies have also shown the role of heparan sulfate in interfering with

lysosomal membrane composition. When the membrane cannot associate with target membranes, there is a decline

in the trafficking of proteins, which can affect the function of organelles such as the mitochondria. A decline in

mitochondria function has widespread consequences.24

Symptoms & Diagnosis. Symptoms of MPS III begin to appear during early childhood, usually at around one year

of age. At first, behavior problems and delayed speech are most evident. An affected child may become restless and

21 http://pathologyoutlines.com/topic/thyroidlsd.html. 22 McGlynn R, Dobrenis K, Walkley SU (2004) Differential subcellular localization of cholesterol, gangliosides, and

glycosaminoglycans in murine models of mucopolysaccharide storage disorders. J Comp Neurol 480: 415–426. 23 Ohmi K, Greenberg DS, Rajavel KS, Ryazantsev S, Li HH, Neufeld EF (2003). Activated microglia in cortex of mouse models

of mucopolysaccharidoses I and IIIB. 100(4):1902-1907. 24 Fedele AO (2015). Sanfilippo syndrome: causes, consequences, and treatments. The Application of Clinical Genetics. 8:269-281.

April 19, 2017

have frequent sleep disturbances. Between the ages of 2-6, there is often a progression of intellectual disability and a

loss of previously learned skills. In the later stages, affected children become unsteady with frequent falls and eventually

lose the ability to walk. Seizures and movement disorders may also occur.25

There will also be notable differences in physical features for those affected. Coarse facial features, while less

prominent in individuals with MPS III compared to individuals with other types of MPS, may be present. Individuals

with MPS III will most likely have macrocephaly, mild hepatomegaly (enlarged liver), and umbilical or inguinal hernia.

It is also possible that individuals will have short stature, joint stiffness, and mild skeletal deformities. Chronic diarrhea,

respiratory problems, and difficulties with hearing and vision may also develop with age. MPS III type A will lead to

the most severe symptoms out of the four types of the disorder.26

To diagnose MPS III, a urine test will initially be used to detect GAG since most individuals with MPS will have

elevated levels. Another important test is measurement of enzymatic activity in blood or skin cells. To diagnose

different types of MPS III, tests need to be run to examine the specific enzymatic activity that varies between A, B, C

and D. ELISA is combined with a more sensitive assay that makes use of radiolabeled oligosaccharides. The

combination of these two assays allows for accurate prediction of the disease and its severity.27 Genetic testing can

also be performed to identify the disease-causing mutation. Prenatal diagnosis is also possible through screening of

cells from chorionic villi at 9-10 weeks of gestation or cells from amniocentesis at 15-16 weeks gestation.28 This is

typically performed when there is a family history of the disease.

Treatment. Currently, there are no effective treatments for individuals affected by MPS IIIA. Neither enzyme

replacement therapies (ERT) nor hematopoietic stem cell transplantation have been shown to be effective in MPS

IIIA. Attempts have been made to develop ERTs that can cross the blood-brain barrier (BBB); however, this work

has not resulted in the approval of any therapies for MPS IIIA. Current treatments for MPS IIIA are palliative and

intended to improve quality of life. These can include anticonvulsants to treat seizures, as well as sedatives and

melatonin to addresses sleep problems.

Disease Market Information

Epidemiology. Lysosomal storage disorders (LSD) are a collection of more than 50 inherited diseases resulting from

lysosomal dysfunction. LSDs have a collective prevalence of 1 per 7,000 live births.29 MPS IIIA is the most common

of the four types of MPS.30 There are an estimated 0.5 to 1.2 cases per 100,000 live births,31 which translates to an

annual incidence of roughly 82 MPS IIIA cases combined in the US and Europe. The worldwide prevalence is thought

25 Fedele, A, 2015. Sanfilippo syndrome: causes, consequences, and treatments. Applied Clinical Genetics, 8, pp269-281. 26 Valstar MJ, et al., 2008. Sanfilippo syndrome: A mini-review. Journal of Inherited Metabolic Disorders, 31, pp240–252. 27 Perkins, KJ, et al., 2001. Prediction of Sanfilippo phenotype severity from immunoquantification of heparan-N-sulfamidase in

cultured fibroblasts from mucopolysaccharidosis type IIIA patients. Mol Genet Metab, 73, pp306-312. 28 Hopwood JJ (2005). Prenatal diagnosis of Sanfilippo syndrome. Prenat Diagn. 25:148–150. 29 Hocquemiller, M, et al., 2016. Adeno-Associated Virus-Based Gene Therapy for CNS Diseases. Human Gene Therapy, 27(7),

pp478-496. 30 Meyer, A., et al., 2007. Scoring evaluation of the natural course of mucopolysaccharidosis type IIIA (Sanfilippo syndrome type

A). Pediatrics, 120, e1255– e1261. 31 Heron, B, et al., 2011. Incidence and natural history of mucopolysaccharidosis type III in France and comparison with United

Kingdom and Greece. American Journal of Medical Genetics, 155A(1), pp58-68.

April 19, 2017

to be roughly 3,000. Because MPS IIIA is an autosomal recessive disease that does not affect sex chromosomes, it

affects males and females equally.32 MPS IIIA is most prevalent in northwestern Europe. Frequency and progression

of the disease may differ by country depending on the types of mutations present in certain regions. This suggests that

different mutations confer varying degrees of disease severity, although no firm correlations between genotype and

phenotype have been established.33

Market Size. The current market for drugs to lysosomal storage disorders is approximately $5.4 billion. However,

there are no approved treatments for lysosomal storage disorders (LSD) that involve the CNS, even though these

types of disorders make up 60% of the total cases of LSDs. A new entrant addressing LSDs with CNS involvement

can expect to capture a substantial portion of the market. The lysosomal disorders drug market is dominated by

enzyme replacement therapies (ERT), which account for roughly 90% of the market. Substrate reduction therapy

(SRT) and cysteine depletors together make up about 7% of the market.

Pricing and Market Share Analysis. Given the lack of currently approved drugs for MPS IIIA, the best indicators

for pricing are the cost and revenues of treatments for other lysosomal storage disorders. Figure 13 shows the sales

of ERTs and SRTs achieved in 2015, as well as the incidence of the targeted disease. Sales of drugs to treat MPS types

I, II, and IV generate annual sales between $200 million and $550 million. MPS type I, which has a similar incidence

to MPS IIIA, may provide some guidance for the market opportunity that may exist in MPSIIIA. Genzyme’s

Aldurazyme (iduronidase) for MPS I reached sales of $218 million in 2015, and we note that pricing for a gene therapy

may be substantially higher.

32 Blanch L, et al., 1997. Molecular defects in Sanfilippo syndrome type A. Hum Mol Genet, 6(5), pp787-91. 33 Heron, B., Mikaeloff, Y., Froissart, R., et al. (2010). Incidence and natural history of mucopolysaccharidosis type III in France

and comparison with United Kingdom and Greece. American Journal of Medical Genetics (Part A), 155, pp58–68

April 19, 2017

Figure 13. 2015 Revenue and Disease Incidence for Drugs Treating Lysosomal Storage Disorders

Disease Drug Company 2015 Sales Incidence*

Gaucher I

Cerezyme Genzyme $848 M 1/100,000

Cerdelga Genzyme $73 M 1/100,000

Elelyso Protalix $26 M 1/100,000

Vpriv Shire $342 M 1/100,000

Zavesca Actelion $96 M 1/100,000

Fabry Fabrazyme Genzyme $657 M 1/80,000

Replagal Shire $441 M 1/80,000

Pompe Myozyme/

Lumizyme Sanofi $721 M 1/57,000

MPS I Aldurazyme Genzyme $218 M 1/100,000

MPS II Elaprase Shire $553 M 1/166,000

MPS IVA Vimizim Biomarin $228 M 1/250,000

MPS IV Naglazyme Biomarin $303 M 1/250,000

Others $929 M

Total $5,435 M

* Incidence in terms of live births

Source: Corporate Presentation

Figure 14 shows the annual pricing of treatments for lysosomal storage disorders. The average annual cost is roughly

$321,000, reflecting the substantial premium pricing that is possible for ultra-orphan indications. Pricing for orphan

indications is often a function of the disease prevalence. We have explored the relationship between pricing and disease

prevalence in a previous note.

April 19, 2017

https://goo.gl/bSus0C

Figure 14. Annual Treatment Costs per Patient for Lysosomal Storage Disorders

Indication Drug Company Annual Treatment

Cost

Gaucher’s disease

Cerezyme Genzyme $433,000

Vpriv Shire $376,000

Elelyso Protalix $405,000

Gaucher’s / Niemann-Pick Zavesca Actelion $295,000

Fabry disease Fabrazyme Genzyme $200,000

Replagal Shire $200,000

MPS I Aldurazyme Genzyme $200,000

MPS II Elaprase Shire $375,000

MPS IV Naglazyme Biomarin $365,000

Pompe disease Myozyme Genzyme $300,000

MPS IVA Vimizim Biomarin $380,000

Average yearly cost per patient $321,000


Clinical Data Discussion

Lysogene has successfully completed a Phase I/II study evaluating LYS-SAF301, an AAVrh10-based gene therapy,

which demonstrated a favorable safety and tolerability profile as well as encouraging early indications of efficacy. Based

on these results, Lysogene has produced a second-generation candidate, LYS-SAF302, that is more potent than LYS-

SAF301 based on preclinical data, and the Company expects to move forward with this candidate in future studies.

The Company has discussed plans for a pivotal Phase II/III trial with regulators in the US and Europe. This trial is

expected to enroll up to 20 patients and run for 12 months. The trial will also include a 4-year extension period to

measure long-term safety and efficacy of the treatment. For a control group, the trial will look to data from the

Company’s ongoing natural history study. Lysogene plans to initiate the pivotal study by the first quarter of 2018, and

this may provide for a data readout in the mid-2020.

Phase I/II Trial

This trial demonstrated that intraparenchymal injections of LYS-SAF301 were safe and well tolerated in patients with

MPS IIIA. There were no treatment-related adverse effects (TEAE) and the drug appeared showed signs of clinical

benefit for the youngest patient. There was also no evidence of an immune response to the AAV vector injection.

April 19, 2017

Trial Design. Lysogene conducted an open-label, single-arm Phase I/II study to assess the safety and tolerability of

LYS-SAF301 in four children diagnosed with MPSIIIA.34 All four patients were between the age of 18 months and 6

years. All patients received intracerebral injections of LYS-SAF301 at a dose of 7.2 x 1011 viral copies/patient directly

into the brain. Injections were made along 6 tracks at 2 different depths, resulting in a total of 12 injection sites during

a single neurosurgical procedure. The primary endpoint was safety and tolerability through a one-year follow up. Safety

and tolerability were measured by the following: the type and severity of adverse events (AE), clinical parameters

including fever, seizure, headache, lethargy, and new neurological symptoms, radiological parameters based on MRI

results, and measurements of liver function. The secondary endpoint was a series of exploratory tests, including brain

MRI, neurocognitive and behavioral tests, and biomarkers in blood, urine, and cerebrospinal fluid (CSF). Cognitive

tests in this trial include the PEP-3, Vineland Adaptive Behavior-II, and Toddler Behavioral Assessment Questionnaire

(TBAQ) tests, which test the following:

▪ PEP-3 – a test used in children with autism or other communicative disorders.

▪ Vineland Adaptive Behavior II – a test of a child’s personal and social skills.

▪ TBAQ – a parent assessment tool to evaluate temperament.

The exploratory tests were intended to provide potential surrogate markers upon which to evaluate patients in

subsequent trials.35

Trial Results. Overall, this trial demonstrated that LYS-SAF301 was safe and well-tolerated at the dose tested. At the

one year follow up, the number of adverse events (AE) was similar to that of other protocols.36 There were a total of

87 emergent adverse events. Of those 87, 5 were determined to be serious, because their treatment required a hospital

visit. The 5 serious adverse events (SAE) were gastroenteritis, head injury, viral lung infection, transient bronchospasm

at the induction of anesthesia, and acute viral infection. Diarrhea and upper respiratory tract infections were the two

most commonly reported AEs. Both, however, were also noted in patient medical history before inclusion in the trial.

Figure 15 shows the levels of anti-AAV (top) or anti-SGSH (bottom) antibodies following treatment, as a percentage

of baseline levels. Immune response to AAV vector injection is often a cause of concern in gene therapy, particularly

since AAV is a wildtype virus and a substantial portion of the population naturally possess antibodies against the virus.

However, levels of both antibodies remained stable through the one year follow up, suggesting the absence of an

immune response.

34 https://clinicaltrials.gov/ct2/show/NCT01474343 35 Tardieu, M, et al., 2014. Intracerebral administration of adeno-associated viral vector serotype rh. 10 carrying human SGSH

and SUMF1 cDNAs in children with mucopolysaccharidosis type IIIA disease: results of a phase I/II trial. Human Gene

Therapies, 25, pp506-516. 36 Leone, P et al., 2012. Long-term follow-up after gene therapy for Canavan disease. Science Translational Medicine, 4, pp163-165.

April 19, 2017

Figure 15. Anti-AAVrh10 and Anti-SGSH Antibody Titers as a Percentage of Baseline for Patients 1-4

Anti-AAVrh10 Titers

Anti-SGSH Titers

Source: Tardieu et al., 2014.

Efficacy of treatment was the secondary endpoint for the current trial. Researchers looked at brain atrophy in MRI

images. Atrophy levels were high in both patients #1 and #3, and patients #2 and #4 showed increases over the

follow-up period.

Figure 16 shows changes in performances on cognitive tests, graphed geometrically according to the domains in each

test. Data points within the shaded region indicate decreases, while points outside of the shaded region represent

improvements. The PEP-3 results showed that cognitive and motor skills were low but stable throughout the follow-

up period in patients 1, 2, and 3, although patients 2 and 3 did show declines in fine motor skills. Patient 4 experienced

improvements in motor abilities, language and cognition. Based on the TBAQ test, all four patients showed

improvements in social interactions and ability to perform focused behaviors.

April 19, 2017

Figure 16. Changes in Cognitive and Behavioral Performance Measured by PEP-3, Vineland and TBAQ

Source: Tardieu et al., 2014.

Long-Term Open-Label Extension (OLE) Study

Lysogene is currently conducting an open-label extension study to evaluate the long-term safety and tolerability of

LYS-SAF301. This study will follow patients for 5 years post-treatment. Three-year results have been reported from

the study, suggesting that the AAV-based gene therapy is safe and well-tolerated over the long-term in patients affected

with MPS IIIA. The trial is still ongoing and we await 5 year data.

Trial Design. Lysogene’s long-term follow up study is an open-label extension (OLE) study for patients who have

already been treated with LYS-SAF301.37 The primary endpoint is an evaluation of long-term safety and tolerability

of intracerebral LYS-SAF301 administered during the Phase I/II trial. Safety and tolerability are measured through

37 https://clinicaltrials.gov/ct2/show/NCT02053064

April 19, 2017

assessment of AEs. The secondary endpoints are an assessment of potential biomarkers for drug efficacy and

collection of further data on the use of LYS-SAF301 to treat neurological and psychological impairments.

Planned Pivotal Phase II/III Trial

This pivotal Phase II/III study is designed to evaluate the safety and efficacy of LYS-SAF302, Lysogene’s second-

generation product candidate, in patients with MPS IIIA. The Company has discussed this trial with US and EU

regulators and it has been designed to satisfy the provided guidance. Lysogene plans to launch this study by the first

quarter of 2018 and expects to enroll up to 20 patients. This could provide for a data readout by the middle of 2020.

Trial Design. This pivotal study will compare the disease progression of patients treated with LYS-SAF302 to a

control cohort of patients evaluated in the Company’s ongoing natural history study. Lysogene expects to enroll up

to 20 MPS IIIA patients with a developmental quotient greater than 50%. The developmental quotient is the ratio of

the age of child into which test scores put the child to the actual age of the child. Enrolled subjects will receive direct

CNS delivery of LYS-SAF302 into multiple brain sites. LYS-SAF302 is more potent than its predecessor product and

is expected to be used in this trial at a higher dose than was used in the Phase I/II study. The primary endpoint of this

trial will be an assessment of neurocognitive and motor development. Secondary endpoints are expected to include

assessments of behavior, sleep, quality of life, AEs, and MRI scans. The primary efficacy analysis will be conducted at

12 months with a secondary efficacy analysis to follow at 24 months. Treated patients will be followed for a total of 5

years.

Natural History Study

Lysogene is currently conducting a natural history study (NHS) in up to 25 MPS IIIA patients who remain untreated.

The purpose of this study is to add to the published data on the course of MPS IIIA and to use the data as a control

group for the pivotal Phase II/III trial. The first patient was enrolled in June 2016 and first-year data are expected in

early 2018. Second-year data from the study will follow in the first quarter of 2019.

Trial Design. This observational natural history study will recruit up to 25 patients under the age of 10 with an

emphasis on patients under the age of 5.38 The study will provide details on the course of MPS IIIA through clinical,

biochemical, neurocognitive, developmental, and behavioral measures. The primary endpoint is the measurement of

cognitive function on the Bayley scales of Infant and Toddler Development (3rd edition). The secondary endpoints

are measures of change in behavior, sleep disturbance, quality of life, and cortical grey matter volume.

Other Drugs in Development

Aside from Lysogene, Abeona Therapeutics is the only other company with a program in clinical development.

Abeona is also developing an AAV9-based gene therapy to treat MPS IIIA and is Lysogene’s closest competitor.

Abeona is currently conducting a Phase I/II trial for ABO-102 and reported interim data in October 2016. There are

4 preclinical programs as well, including 2 gene therapies. The current development landscape for MPS IIIA is shown

in Figure 17.

38 https://clinicaltrials.gov/ct2/show/NCT02746341

April 19, 2017

Figure 17. Other Drugs in Development for MPS IIIA

Treatment Company Type Stage Next Milestone

LYS-SAF302 Lysogene Gene therapy Phase II/III

ready

Initiation of Phase

II/III in Q1 2018

ABO-102 Abeona Therapeutics Gene therapy I/II Updated results in

Q1 2017

EGT-101 Esteve S.A. Gene therapy Preclinical

Initiation of Phase

I/II study in H1

2017

AGT-184 ArmaGen

Therapeutics

Enzyme

replacement Preclinical -

Lentivector Orchard Therapeutics Gene therapy Preclinical -

SOBI003 Swedish Orphan

Biovitrum

Enzyme

replacement

therapy

Preclinical Clinical trials in 2018


ABO-102 – Abeona Therapeutics (NasdaqCM: ABEO)

Abeona Therapeutics is developing ABO-102, an AAV9-based gene therapy, to treat MPS IIIA, taking a similar

approach to Lysogene’s LYS-SAF302. Both ABO-102 and LYS-SAF302 are AAVs that encode the SGSH gene.

However, there are several important differences, most important of which is in the route of administration. ABO-

102 is given intravenously, while LYS-SAF302 is administered through a series of injections directly into the brain.

Abeona has received Orphan Drug designation from the FDA and EMA, as well as Rare Pediatric Disease designation

and Fast Track status from the FDA. While Abeona has presented interim data showing encouraging signs of efficacy,

it is not yet clear what the regulatory path for ABO-102 will be.

Phase I/II Trial. In Abeona’s first-in-human, open-label Phase I/II trial, MPS IIIA patients are given a single

intravenous injection of ABO-102.39 The delivery approach has been described in another manuscript on the use of

viral vectors to treat MPS IIIB.40 Patients are separated into two cohorts: one cohort (n=3) receiving a low-dose of

ABO-102 (5x1012 vg/kg) and another (n=3-6) receiving a high dose (1x1013 vg/kg). The following assessments will

be taken at baseline, 6 and 12 months: neurocognitive tests, motor tests, standard lab test, SGSH activity levels,

heparan sulfate levels, and quality of life. MRIs of the liver, spleen, and brain are also taken at baseline and 12 months.

The primary endpoint of this Phase I/II trial is safety and tolerability, determined by whether the patient develops

unacceptable toxicities. Secondary endpoints include measuring heparan sulfate and urine GAG levels, SGSH activity

39 https://clinicaltrials.gov/ct2/show/NCT02716246 40 Murrey, DA, et al., 2014. Feasibility and Safety of Systemic rAAV9-hNAGLU Delivery for Treating Mucopolysaccharidosis

IIIB: Toxicology, Biodistribution, and Immunological Assessments in Primates. Human Gene Therapy Clinical Development, 25(2),

pp72-84.

April 19, 2017

levels, behavioral changes, quality of life, and neurocognitive assessments using the Leiter International Performance

Scale and the Mullen Scales of Early Learning.

Trial Results. Abeona has reported interim results from the trial on 3 subjects who were treated with the low-dose

of ABO-102. The trial is ongoing and enrollment for the high-dose cohort has commenced. To date, ABO-102 has

been considered safe and well-tolerated, although the data come from a small number of patients. At 6 months,

Abeona has reported a 63.1% reduction in heparan sulfate fragments in the cerebrospinal fluid (CSF). The company

noted a 25.8% reduction in HS fragments at 1 month, suggesting that there is a sustained improvement over time. In

addition, there decreases in liver and spleen volumes were observed. There are no accepted surrogate markers for

MPS IIIA, so it is difficult to gauge the impact on the disease.

The cognitive effects induced with ABO-102 are not easily interpreted, in light of the mixed results and small sample

size. On the Vineland Adaptive Behavior Scale (n=2), one patient improved, while the other worsened, and neither

change was meaningful relative to the natural history data. On another cognitive measure, the Mullen Scales of Early

Learning, one of the patients showed declines on 3 of the subscores relative to the natural history of MPS IIIA.

Preclinical Programs for MPSIIIA

There are currently 4 preclinical programs of interest: Esteve S.A. ( private), Orchard Therapeutics (private), ArmaGen

(private), and Swedish Orphan Biovitrum (Stockholm: SOBI.ST).

Esteve S.A. and Orchard Therapeutics both have preclinical research on gene therapy in models of MPS IIIA. Esteve

S.A.’s EGT-101 program uses the AAV9 vector to increase SGSH enzyme activity levels.41 Orchard Therapeutics, in

combined efforts with Oxford BioMedica (LSE: OXB.L), used lentiviral vectors in gene therapy to restore SGSH

activity.42 Lentiviral vectors are able to transfer larger amounts of genetic information to cells than AAV, making them

a good candidate for use in gene therapy.

ArmaGen and Swedish Orphan Biovitrum carried out preclinical research on enzyme replacement therapy in models

of MPS IIIA. ArmaGen’s AGT-184 enzyme has similar activity to SGSH with the ability to cross the blood brain

barrier.43 Swedish Orphan Biovitrum’s SOBI003 is a chemically modified variant of recombinant human SGSH. 44 Its

increased half-life allows for it to cross the blood brain barrier and act in the brain.

41 Haas, Michael J. 2013. "MPS IIIA: gene therapy for brain and body." SciBX: Science-Business eXchange 6.28. 42 "Stem Cell Gene Therapy for Fatal Childhood Disease Ready for Human Trial." Stem Cell Gene Therapy for Fatal Childhood

Disease Ready for Human Trial. 11 May 2016. 43 Urayama, A.; Grubb, J. H.; Sly, W. S.; Banks, W. A. 2008. Mannose 6-phosphate receptor-mediated transport of sulfamidase

across the blood−brain barrier in the newborn mouse. Mol. Ther. 1261−1266. 44 SOBI. European Commission Grants SOBI003 Orphan Designation for the Treatment of MPS IIIA. N.p., 19 Oct. 2016.

<http://mb.cision.com/Main/14266/2104284/577060.pdf>.

April 19, 2017

LYS-GM101: A Gene Therapy to Treat GM1 Gangliosidosis

LYS-GM101 is an AAVrh10-based gene therapy to treat GM1 gangliosidosis by direct delivery of the gene encoding

the beta-galactosidase enzyme into the CNS. Lysogene has collaborative agreements with investigators from the

University of Massachusetts Medical School (UMMS) and Auburn University to conduct IND-enabling preclinical

studies. The Company expects to launch a Phase I/II study to evaluate the safety and efficacy of LYS-GM101.

Lysogene has received Orphan Drug designation of FDA and EMA and Rare Pediatric Disease designation form the

FDA for LYS-GM101.

GM1 Gangliosidosis

GM1 gangliosidosis is an inherited disorder that leads to degeneration of neurons in the central and peripheral nervous

systems. While there are three subtypes of this disease depending on age of onset, all arise from mutations in the

GLB1 gene. The GLB1 gene codes the beta-galactosidase enzyme in lysosomes, which breaks down gangliosides;

however, when the enzyme is mutated gangliosides accumulate in lysosomes. This build-up leads to neuronal cell

death and pathogenesis. GM1 gangliosidosis is an autosomal recessive disease. According to the NIH, incidence is

roughly 1 in 100,000-200,000 newborns. Symptoms are most severe for infantile GM1 gangliosidosis, which is the

most common form of the disease, and those affected with the disease usually do not survive past early childhood.

There are currently no effective treatments for the disease.

Causes & Pathogenesis. GM1 gangliosidosis is caused by mutations to the GLB1 gene. The three subtypes of GM1

gangliosidosis are infantile, juvenile and adult, and all have similar symptoms and are caused by mutations to the same

gene. Thus far, 102 mutations have been reported in the GLB1 gene, with the majority being missense or nonsense

mutations.45 This gene is responsible for making the beta-galactosidase enzyme, which has a key function in the brain.

Beta-galactosidase acts in lysosomes, where it degrades GM1 gangliosides, as shown in Figure 18. It does this by

catalyzing the hydrolysis of beta-galactosidases into monosaccharides through breaking glycosidic bonds.46

45 Brunetti-Pierri N, Scaglia F. 2008. GM1 gangliosidosis: review of clinical, molecular and therapeutic aspects. Mol Genet Metab.

94: 391-396. 46 Sandhoff K., Harzer K. 2013. Gangliosides and gangliosidoses: principles of molecular and metabolic pathogenesis. J.

Neurosci. 33: 10195–10208.

April 19, 2017

Figure 18. Pathway of Lysosomal Ganglioside Degradation

Source: Brunetti-Pierri et al, 2008

With mutations in the gene encoding beta-galactosidase, GM1 ganglioside accumulates in the lysosomes. Gangliosides

are the primary glycolipids in neuronal plasma membranes, and they play an important role in multiple signaling

pathways. In high levels, however, GM1 gangliosides are toxic, especially in the brain. Ganglioside accumulation leads

to neurodegeneration, which eventually can disrupt normal function.

It is unknown exactly how ganglioside accumulation leads to neuronal cell death. However, it is hypothesized that

ganglioside buildup may impair synaptic transmission. Other possible mechanisms include disturbed neuron-

oligodendrocyte interactions, stress response, and abnormal axoplasmic transport leading to myelin deficiency.47

Symptoms & Diagnosis. GM1 patients can be separated into three subtypes based on the age of disease onset. The

infantile form (Type I) is the most severe and is usually diagnosed by 6 months of age. Symptoms become apparent

in the juvenile form (Type II) between 18 months to 5 years of age. The least common adult form (Type III) has a

wide onset range of 3 to 30 years of age.48

Symptoms are the most severe for infantile GM1 gangliosidosis, also referred to as Type I. By 6 months, development

begins to slow and muscles begin to weaken. There is eventually a developmental regression. The children may develop

an enlarged liver and spleen, skeletal abnormalities, seizures, severe intellectual disabilities, and clouding of the cornea.

The retina will deteriorate and vision loss occurs. Some individuals may also have coarse facial features, enlarged gums,

and cardiomyopathy. Most individuals affected by Type I GM1 gangliosidosis do not survive past early childhood.

47 Brunetti-Pierri N, Scaglia F. 2008. GM1 gangliosidosis: review of clinical, molecular and therapeutic aspects. Mol Genet Metab.

94: 391-396. 48 Weismann C, Ferreira J, Keeler A, Linghua Q, Shaffer S, Xu Z, Gao G, Sena-Esteves M; 2015. Systemic AAV9 gene transfer

in adult GM1 gangliosidosis mice reduces lysosomal storage in CNS and extends lifespan. Hum Mol Genet. 24 (15): 4353-4364.

April 19, 2017

Patients with juvenile GM1 gangliosidosis can experience a wide variety of symptoms. Meanwhile, those affected with

adult GM1 gangliosidosis usually have normal early neurological development and no physical abnormalities. 49 Adult

GM1 gangliosidosis patients will also undergo a slow progression of dementia with certain aspects of Parkinson’s

disease.50

To diagnose GM1 gangliosidosis, patients may undergo enzyme analysis or genetic testing of the GLB1 gene. Prenatal

diagnosis may also be done through enzyme activity analysis or genetic testing of chorionic villus or amniotic fluid

cells.51 There are currently no approved therapies for individuals affected by GM1 gangliosidosis. While some

symptoms may be treated, there are no effective means for slowing or stopping the progression of the disease.

Planned Clinical Program for LYS-GM101

Lysogene plans to conduct a Phase I/II study to evaluate the safety, tolerability, and efficacy of LYS-GM101 in the

treatment of GM1 patients. The trial will consist of two parts: a 14-month dose-escalation safety study and a 12-month

evaluation of efficacy with an additional 12 month follow-up. In the dose-escalation portion of the study, 3 subjects

will be enrolled per dose tested for a total of 6 subjects. The efficacy portion of the study will enroll 6 new subjects.

The trial will follow an adaptive design, allowing for adjustments to the study design as the trial progresses. The

primary endpoint will assess motor function, and the secondary endpoints will assess speech ability, plus safety and

tolerability. The analysis of these endpoints will compare these data to natural history data. Lysogene expects to launch

this trial in the first quarter of 2019 with sites in both the US and Europe.

Other Drugs in Development

Aside from Lysogene’s LYS-GM101, there is only other gene therapy in development for GM1. However, unlike

Lysogene’s direct delivery into the brain, the other gene therapy, in development by UMass, uses IV administration.

This may not be the ideal route of administration and may not provide for sufficient viral titers in the brain. The

development pipeline for GM1 is shown in Figure 19.

49 Muthane U, Chickabasaviah Y, Kaneski C, et al. 2004. Clinical features of adult GM1 gangliosidosis: report of three Indian

patients and review of 40 cases. Mov Disord. 11:1334-41. 50 Suzuki K. 1991. Neuropathology of late onset gangliosidosis. A review. Dev Neurosci. 13(4-5): 205-10. 51 Regier D, Tifft C. 2013. GLB1-related disorders. GeneReviews. University of Washington, Seattle.

April 19, 2017

Figure 19. Development Pipeline for GM1

Company Program Mechanism Route Stage

Univ of

Minnesota

Miglustat

& ketogenic diet Chaperone Oral Phase III

Lysogene LYS-GM101 AAVrh10 gene

therapy

Neurosurgical

procedure Preclinical

UMass AAV9 AAV9 gene

therapy

Single IV

injection Preclinical

Dorphan MPS IVB

(Morquio disease type B) Chaperone Oral Preclinical

Biostrategies

LC

Lectin-assisted delivery of

corrective enzyme

Enzyme

replacement Transnasal Preclinical


Intellectual Property & Licensing

LYS-SAF302. Lysogene has signed a licensing agreement with RegenX Bio, a subsidiary of the University of

Pennsylvania, covering the use of AAVrh10 to treat MPS IIIA.

GM1 Gangliosidosis. Lysogene has signed a partnership agreement with the University of Massachusetts covering

the development therapies for GM1. Lysogene also sponsors research at UMass and Auburn University.

Management Team

Karen Aiach

Founder & CEO

Founder and CEO of Lysogene, Ms. Aiach is also the mother of a child with MPS IIIA. She has a strong business

background starting her career with Arthur Andersen specializing in audit and transaction services. Her entrepreneurial

experience includes founding and running a financial business consultancy. From 2008 to 2009, Ms. Aiach served as

a Member of the Pediatric Committee at the European Medicines Agency (EMA), established in accordance with the

European Pediatric Regulation, as a patient representative. In 2008, she also served on the French Ethical Review

Board CCPPRB at Ambroise Paré Hospital. Ms. Aiach has been involved with several not-for-profit organizations

engaged in advocacy and research in the field of rare diseases such as Alliance Sanfilippo and Eurordis, where she

served on the board as treasurer from 2010 to 2011. She is a founding executive member of the International Rare

Diseases Research Consortium (IRDiRC). Ms. Aiach graduated from the ESSEC Business School and majored in

Economics.

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Kimberley S. Gannon

Chief Scientific Officer

Kim is responsible for the continuing development of Lysogene’s scientific programmes. Prior to joining Lysogene,

Kim was Senior Vice President of Preclinical Research and Development at NeuroPhage Pharmaceuticals, Inc., where

she directed preclinical and nonclinical drug development activities. She has also held various leadership positions at

several early stage ventures, including CereMedix where she was VP of Research & Development, EPIX (Predix)

Pharmaceuticals where she served as Senior Director of Biology, and Eolas Biosciences where she was Head of US

Operations. Dr. Gannon received her PhD in Neuroscience from Florida State University and conducted her

postdoctoral training at the Roche Institute of Molecular Biology, Hoffmann-LaRoche Inc., in New Jersey and at

Mount Sinai School of Medicine in the Department of Physiology and Biophysics in New York.

Mark Plavsic

Chief Technology Officer

Mark is responsible for Lysogene’ s manufacturing strategy and CMC operational development. He has extensive

technical experience across a diverse range of functions, proven knowledge of quality compliance and regulatory

requirements and strong business and leadership skills gained from over 30 years of experience working in North

America, Europe and Australasia. Prior to joining Lysogene, Mark worked as Head of Process Development and

Manufacturing at Torque Therapeutics, leading multiple functions including process and analytics development and

ensuring quality controls and design across manufacturing. Prior to that, Dr. Plavsic held multiple positions with

Sanofi Genzyme, Astra Zeneca and Invitrogen Corporation. Dr. Plavsic received his Ph.D in Virology and Molecular

Cell Biology, M.S. in Virology and Immunology, and Doctor of Veterinary Medicine degree from the University of

Belgrade in Yugoslavia. He has a Board certification in Microbiology, subspecialty Virology from the American

College of Veterinary Microbiologists.

Soraya Bekkali

Senior Vice President and Chief Medical Officer

Soraya is responsible for Lysogene’s clinical development and regulatory affairs. Physician by background, Soraya

specialized in clinical research and biostatistics before starting her career in academia. Prior to joining Lysogene,

Soraya worked for Aventis Pharma, followed by Orphan Europe, a pharmaceutical company dedicated to the

development of treatments for rare diseases, before joining Sanofi in 2007, where she held successively increasing

leadership positions including Vice President and Global Ophthalmology Unit Head. Soraya’s extensive industry

experience spanning from early development to ensuring market access, with an important focus on viral and non-

viral gene therapy products, has led to a rich breadth of experience across a variety of therapeutic areas.

Samantha Parker

Chief Patient Access Officer

Samantha Parker is Head of Lysogene’s Patient and Policy Affairs. Ms. Parker has specialised in rare disease research

and public health since 2000. She has focused on expanding the expert disease community of healthcare professionals,

patients, industry and regulators; building disease registries and natural history studies; developing consensus care

guidelines; and developing strategies to improve the quality of diagnosis and patient care. Ms. Parker contributed, for

several years, to the area of independent professional education in rare diseases. She is a member of the European

April 19, 2017

Group of Experts on Rare Diseases (EGRD) and the International Rare Diseases Research Consortium (IRDiRC).

Ms. Parker has a B.A. (Hons) from Edinburgh University and an M.B.A (with distinction) in Life Sciences.

Sean O’Bryan

Vice President of Regulatory Affairs and Quality Assurance

Sean is responsible for providing global regulatory strategic leadership and for the creation and maintenance of quality

systems assuring global compliance. Prior to joining Lysogene, he was the Director of Regulatory Affairs at bluebird

bio leading efforts on the treatment of the rare disease CCALD through LVV gene therapy where he initiated and led

the RA CMC group across all programs including CNS, hematology and oncology. Prior to this, he worked 8 years

at Genzyme/Sanofi serving as a global regulatory lead for the Cell Therapy and Regenerative Medicine division. Sean

has more than 20 years of regulatory experience across a range of categories including biologics, gene therapy,

chemistry, manufacturing and control (CMC) and medical device. Sean holds a BS in Biology and Analysis and Policy

from Boston University and is RAPs certified.

Sarah Ankri

Finance Director

Sarah is responsible for overseeing Lysogene’s financial operations, budget and financing strategy. Prior to joining

Lysogene, she was CFO at Theraclion where she successfully led the company’s IPO in 2014. She acquired her

financial knowledge related to Bio- and Medtech companies, including fundraising (Europe and USA) during the six

years she spent at Ernst & Young working on legal audit and advisory/acquisition missions in the healthcare sector.

Sarah is a graduate of the National Institute of Agronomy (INA P-G/AgroParisTech) and has a Masters in Economy

and Management.

Risk to an Investment

We consider an investment in Lysogene to be a high-risk investment. Lysogene has generated limited clinical data to

date, and early signs of safety and efficacy may not necessarily translate into late-stage success. There are clinical and

commercialization risks associated with their program as well. As with any company, Lysogene may be unable to

obtain sufficient capital to fund planned development programs. There are regulatory risks associated with the

development of any drug, and Lysogene may not receive FDA or EMA approval for its candidates despite significant

time and financial investments. Regulatory approval to market and sell a drug does not guarantee that the drug will

penetrate the market, and sales may not meet expectations.

April 19, 2017

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