Taysha Gene Therapies, Inc. (TSHA) Q2 2021 Earnings Call Transcript

Taysha Gene Therapies, Inc. (TSHA -7.12%)
Q2 2021 Earnings Call
Aug 16, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Welcome to the Taysha Gene Therapies second-quarter 2021 financial results and corporate update conference call. [Operator instructions] As a reminder, this call is being recorded today, August 16, 2021. I will now turn the call over to Dr. Kimberly Lee, senior vice president of corporate communications and investor relations.

Please go ahead.

Kimberly Lee -- Senior Vice President of Corporate Communications and Investor Relations

Good morning and welcome to Taysha's second-quarter 2021 financial results and Corporate Update conference call. Joining me on today's call are RA Session II, Taysha's president, CEO, and founder; Dr. Suyash Prasad, chief medical officer and head of R&D and Kamran Alam, chief financial officer. After our formal remarks, we will conduct a question-and-answer session and instructions will follow at that time.

Earlier today, Taysha issued a press release announcing financial results for the second quarter ended June 30, 2021. A copy of this press release is available on the company's website and through our SEC filings. Please note that on today's call, we will be making forward-looking statements including statements relating to the safety and efficacy and the therapeutic and commercial potential of our investigational drug candidates. These statements may include the expected timing and results of clinical trials for our drug candidates and the regulatory status and market opportunity for those programs as well as patient manufacturing plans.

This call may also contain forward-looking statements relating to Taysha's growth and future operating results, discovery and development of drug candidates strategic alliances and intellectual property as well as matters that are not historical facts or information. Various risks may cause Taysha's actual results to differ materially from those stated or implied in such forward-looking statements. These risks include uncertainties related to the timing and results of clinical trials and preclinical studies of our drug candidates or dependent upon the strategic alliances and other third-party relationships, our ability to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties and the requirements of substantial funding to conduct our research and development activities. For a list and a description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission.

This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 16, 2021. Taysha undertakes no obligations to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities law. With that, I'd now like to turn the call over to our president, CEO and founder, RA Session II.

RA Session

Thank you, Kim. Good morning and welcome, everyone to our second-quarter financial results and corporate update conference call. Taysha continues to make significant progress on several key clinical manufacturing and strategic corporate initiatives, which were highlighted at our recent R&D and manufacturing investor day as well as our recent press release announcing our nondilutive financing with Silicon Valley Bank. I will elaborate on some of our recent key achievements and review the expected milestones for the remainder of 2021.

Following this, I will turn the call over to Suyash and Kamran for updates on our pipeline developments and financial results, respectively. At our R&D Day held in June, we presented positive data on a number of our key development programs. These data included Phase 1/2 visual acuity data for TSHA-120 in patients with giant axonal neuropathy, or GAN, genotypic-specific MECP2 expression data for TSHA-102 in Rett syndrome, natural history data in GM2 gangliosidosis, preclinical data for TSHA-118 in CLN1, natural history data in CLN1 disease, along with clinical patient phenotype data SURF1-associated Leigh syndrome. We also disclosed the positive effects of TSHA-105 on seizures and associated deaths in SLC13A5 knockout mice, the effects of TSHA-103 an abnormal EEG activity in SLC6A1, knockout and heterozygous mouse models and preclinical data for TSHA-112 in APBD and TSHA-111-LAFORIN and TSHA-111-MALIN in Lafora disease.

Lastly, we disclosed the effects of TSHA-113 on tau expression in MAPT-associated tauopathies. And our two novel approaches for the treatment of Angelman syndrome. Suyash will review these pipeline developments shortly. Part of our success relies on robust, sustainable and high-quality manufacturing to support our portfolio and we are pleased to announce that we have achieved several successful GMP runs that further support our five planned Phase 1/2 clinical trials and numerous IND/CTA enabling studies.

In July, we held a Manufacturing Day to highlight how our flexible and scalable approach, which seamlessly integrates R&D and manufacturing derisked our overall portfolio and supports consistent delivery of high-quality clinical material across our broad pipeline. Our three-pillar approach to manufacturing includes dedicated capacity at UT Southwestern, a collaboration with Paragon, a subsidiary of Catalent and the development of our internal manufacturing facility. We continue to make progress on the construction of our multiproduct facility, in Durham, North Carolina, which will have 2,000 liters of capacity. Additionally, the capacity at UT Southwestern is expected to increase from 500-liter to 700-liter scale by the end of the year, which will continue to support our IND-enabling and early clinical trial efforts and ensure high-quality, efficient and accessible production for our pipeline.

In order to further our mission in the development of novel gene therapies for the treatment of monogenic diseases of the CNS, we recently became a founding member of the newly formed rare disease company coalition. A first-of-its-kind alignment of life science companies committed to discovering, developing and delivering rare disease treatment. We look forward to working together to expedite the delivery of our transformative therapies to the millions of patients with rare diseases. In the second half of this year, we expect numerous value-creating preclinical, clinical and regulatory milestones.

Recently, we have had a number of meetings with multiple regulatory agencies regarding our Rett syndrome GM2 gangliosidosis and CLN1 disease programs as we prepare for IND/CTA submission. I am pleased to share that we have received positive feedback from these agencies that paved the way for multiple anticipated IND/CTA filing in the second half of this year. For TSHA-120, our pivotal stage product candidate in GAN, we anticipate data from the high-dose cohort in the second half of this year and expect to provide a regulatory update by year-end. For GM2 gangliosidosis, we remain on track to report first-in-human safety and HEXA biomarker data in the second half of this year.

For our CLN1 program, which currently has an open IND, we anticipate dosing of the first patient in our Phase 1/2 trial in the second half of this year. Collectively, by year-end, we anticipate that we will have five programs in clinical development. The rapid advancement of our numerous candidates will not be possible without the support of our dedicated and talented team. We recently appointed Mary Newman as Chief Development Officer.

She was a former senior vice president of Regulatory Affairs at Astellas Gene Therapies, formerly Audentes and brings over 30 years of experience in translational development, program management and regulatory affairs. At Taysha, we now have 155 employees in addition to 70 colleagues at UT Southwestern across multiple functional areas, including discovery, translational development, GMP manufacturing and clinical care. The collective expertise and dedication across these teams, including our seasoned board of directors, an independent internationally renowned Scientific Advisory board, uniquely positions the expedited development of our gene therapy candidates and our technology platform. We have ambitious corporate objectives planned over the next 12 to 18 months.

And we are very pleased to have recently entered into a nondilutive term loan agreement with Silicon Valley Bank, that provides Taysha with up to $100 million in non-dilutive financing at an attractive iterate that lowers our overall cost of capital, bolsters our cash position and provides additional financial and operational flexibility. We believe full drawdown of this funding will extend our cash runway to support key value-creating milestones, including the release of Phase 1/2 data from the highest-dose cohort in GAN and Phase 1/2 data in GM2 gangliosidosis, CLN1 disease and Rett syndrome. And importantly, a potential regulatory approval for TSHA-120 in GAN without the need for additional financing. We look forward to updating you on our continued progress throughout the remainder of the year, including at our upcoming Virtual Investor Mini series for our CLN1, Rett syndrome and Angelman syndrome programs where we will feature presentations from key opinion leaders and highlight progress made to date.

I will now turn the call over to Suyash to provide a more detailed update on our R&D initiatives. Suyash, please go ahead.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Thanks, RA. We have made significant progress in the second quarter and continue to achieve important clinical advancements that further support a potential regulatory approval of our most advanced program, TSHA-120, which holds significant promise for patients with giant axonal neuropathy or GAN. At our R&D Day, in addition to the compelling clinical data demonstrating halting of disease progression as assessed by the well-validated and established motor assessment tool, the MFM32, we presented new visual acuity data from the ongoing Phase 1/2 trial investigating TSHA-120 in patients with GAN. In children and adolescents with GAN, there is an ongoing and progressive deterioration in vision toward blindness, which is understandably one of the most challenging and upsetting symptoms from the perspective of the patient and the family.

With this new data, we were able to demonstrate a dose-dependent trend toward stabilization of visual acuity i.e., the ability of AAV9 gene therapy to preserve visual function, which otherwise would be lost. We also discussed in depth the natural history data in GAN that was published in the highly regarded neurology journal, Brain, earlier this summer. As a reminder, all GAN natural history data was generated and supported by the National Institute of Neurological Disorders and Stroke, or NINDS, under the leadership of the principal investigator, Carsten Bonnemann. Included in the publication was the largest cohort of genetically confirmed patients with early and late onset forms of GAN.

This large cross-sectional analysis highlighted clinical differences between patients with early onset versus late onset GAN based on performance on the MFM32, a validated and well-known scale to measure strength and motor function as well as other functional motor scales and disease markers. Additionally, a robust assessment of many clinically relevant outcome measures for GAN was performed, including motor, sensory, respiratory, neurophysiologic, MRI and biopsy assessments. Moreover, this was the first clinical study ever to formally and comprehensively evaluate autonomic nervous system dysfunction in a cohort of individuals with GAN. Overall, this natural history study have instrumental in clinical trial design for the ongoing Phase 1/2 trial and the data included in the Brain publication will serve as baseline data for the natural history comparator arm to the interventional study.

As already noted, we remain on track to report clinical data from the highest dose cohort from this ongoing Phase 1/2 trial in the second half of this year and to provide a regulatory update on the program by year-end. We've also made significant progress across our preclinical programs. Positive preclinical data for TSHA-102 in Rett syndrome was published also in the journal, Brain, that provided quantitative evidence of miRARE's ability to exhibit genotype dependent regulation of MECP2 gene expression on a cell-by-cell basis across different regions of the brain in both wild-type and knockout mouse models of Rett syndrome. We recently have productive and collaborative pre-IND/CTA discussions with several key regulatory agencies and received positive feedback that support our anticipated IND/CTA submission in the second half of this year.

In GM2 gangliosidosis, we were able to discuss in detail at our R&D Day the existing and in-depth natural history data on this condition informs us about disease progression and in particular, motor development delays. We believe these data help provide a comparator for ongoing and future interventional trials. We continue to expect preliminary safety and biomarker data in the Queen's University Phase 1/2 trial for TSHA-101 in the second half of this year. Specifically, we will be disclosing HEXA enzyme activity in serum and CSF and expect that 5% HEXA enzyme activity will be considered a positive result.

In the U.S., we had a productive and informative meeting with the FDA. We remain on track to initiate a Phase 1/2 trial in the second half of this year. Moving on to our CLN1 program. Additional preclinical data for TSHA-118 were presented at R&D Day, which demonstrated sustained preservation of motor function and rescue with higher doses of TSHA-118 and earlier intervention in CLN1 knockout mice.

There are two ongoing natural history studies assessing CLN disease, which will help further our understanding of the disease, inform on our clinical trial design and serve as comparative data in a future trial for TSHA-118. These two studies include a prospective observational study assessing the natural history of CLN diseases and the retrospective and the prospective study to characterize the age of onset of major symptoms and the relationship between age and severity. TSHA-118 currently has an open IND. We recently have very productive and collaborative meetings with several key regulatory agencies and positive feedback on the support dosing of the first patient, which we anticipate should occur in the second half of this year.

TSHA-118 has been granted orphan drug designation, rare pediatric disease designation and fast track designation from the FDA and orphan medicinal product designation from the EMA for the treatment of CLN1 disease. For TSHA-104 in SURF1-associated Leigh syndrome, we announced at R&D Day, new data demonstrating that only a small increase in COX1 activity can significantly improve the clinical phenotype in these patients, further supporting our SURF1 gene replacement strategy with TSHA-104. Reduced COX activity also correlated with disease worsening in patient fibroblasts, further supporting the impact of COX activity on disease outcomes. This phenomenon draws correlations to other diseases that we are targeting, including GM2 and CLN1, while small increases in activity can have a pronounced physiological impact.

We plan to file an IND/CTA for TSHA-104 in the second half of this year. Additionally, a natural history study that is part of our clinical development program is expected to enroll its first patient. This study will follow patients for initial period of time prior to enrollment into the interventional trial. At our R&D Day, Dr.

Rachel Bailey, Assistant Professor in the Department of Pediatrics at UT Southwestern, presented positive preclinical data for TSHA-105 in SLC13A5 deficiency that demonstrated improvement of EEG activity and reduction in seizures and associated deaths in SLC13A5 knockout mice. We continue to advance TSHA-105 toward the clinic and expect that patients currently enroll in an ongoing prospective natural history study would be available to enter our clinical trial. We are currently considering an open label randomized dose escalation Phase 1/2 trial to examine the safety, tolerability and preliminary efficacy of TSHA-105 in the treatment of SLC13A5 deficiency. Biomarkers include citrate levels in the plasma, urine and CSF.

Moving on to TSHA-103 in SLC6A1 haploinsufficiency disorder at our R&D Day, Dr. Kim Goodspeed, Assistant Professor in the Department of Pediatrics neurology and psychiatry and UT Southwestern and Dr. Steven Gray, Associate Professor in the Department of Pediatrics and UT Southwestern and Chief Scientific Adviser at Taysha, highlighted the nature of the disease and the positive preclinical data to date. In SLC6A1 knockout and heterozygous mouse models, CNS administration of TSHA-103 rescued abnormal seizure activity.

Notably, recently obtained positive data demonstrating rescue or functional measures such as nesting, open-field activity, hind-limb clasping and latency to fall from the rotarod. We are now evaluating dose and age response and finalizing the dose from our preclinical pharmacology experiments. We are also developing an interventional trial protocol. In APBD and Lafora, Dr.

Berge Minassian, Division Chief of Pediatric Neurology at UT Southwestern and Chief Medical Adviser at Taysha, provided an in-depth discussion about the nature of both diseases at our R&D Day and highlighted positive preclinical data that supports advancement of these programs. Specifically, TSHA-112 reduced GYS1 expression in the APBD knockout model, which resulted in decreased polyglucosan body formation in mice brain. TSHA-111-LAFORIN and TSHA-111-MALIN reduced GYS1 expression in the laforin and malin knockout models, which resulted in decreased Lafora body formation in mice brain. We continue to make good progress on both programs and are currently developing an interventional trial protocol.

Preclinical data for TSHA-113 in tauopathies presented at R&D Day demonstrated significant reduction in tau mRNA and protein levels, validating the potential use of AAV-mediated gene silencing to achieve lifelong reduction of tau protein levels and supporting further preclinical development for the treatment of tauopathies. Lastly, we were very excited to highlight at our R&D day on novel approaches to treat Angelman syndrome. We are targeting the entire Angelman syndrome population via knockdown of UBE3A-ATS to unsilenced paternal allele and also using a gene replacement strategy on UBE3A to mimic the maternal UBE3A allele expression. We have shown compelling fluorescence images of the cerebellum that demonstrates UBE3A expression following administration of TSHA-106, our short hairpin RNA candidates.

As you can see, our robust portfolio of clinical and preclinical candidates, continues to advance expeditiously. And as RA noted, we have a number of clinical and regulatory catalysts expected in the second half of the year. We will continue to provide updates on our programs throughout the year. With that, I'll turn the call over to Kamran to review our financial results.

Kamran Alam -- Chief Financial Officer

Thank you, Suyash. This morning, I will discuss our recent nondilutive financing and key aspects of our second-quarter 2021 financial results. More details can be found in our Form 10-Q, which will be filed with the SEC shortly. We recently secured a non-dilutive term loan financing for up to $100 million from Silicon Valley Bank, or SVB, with $40 million available at closing, of which Taysha has drawn $30 million.

We have the option to draw down the remaining tranches subject to certain conditions. The interest rate is the greater of 7% or The Wall Street Journal prime rate plus 3.75% and there are no financial covenants or warrants associated with this financing. We believe that full drawdown of this funding will extend our cash runway through multiple key value-creating milestones, including a potential regulatory approval of TSHA-120 in GAN without the need for additional financing. Moving on, as indicated in our press release today, R&D expenses were $30.6 million for the three months ended June 30, 2021 compared to $3.1 million for the three months ended June 30, 2020.

The $27.5 million increase was primarily attributable to an increase of $10.3 million of expenses incurred in research and development, manufacturing and other raw material purchases, which included cGMP batches produced by Catalent and UT Southwestern. We incurred an increase in employee compensation expenses of $8.5 million, which included $2.2 million of noncash stock-based compensation and $8.7 million in third-party research and development expenses, which includes clinical trial CRO activities, GLP toxicology studies and consulting for regulatory and clinical studies. G&A expenses were $10.1 million for the second quarter ended June 30, 2021, compared to $0.9 million for the second quarter ended June 30, 2020. The increase was primarily attributable to incremental compensation expense, which included noncash stock-based compensation and additional consulting and professional fees.

Net loss for the second quarter ended June 30, 2021 was $40.9 million or $1.09 per share as compared to a net loss of $21.2 million or $1.95 per share for the second quarter ended June 30, 2020. As of June 30, 2021, Taysha had $197.4 million in cash and cash equivalents. This does not include funds from the recently announced debt financing. And with that, I will hand the call back to RA.

RA Session

Thanks, Kamran. We are pleased to have shared with you our success over the second quarter. Looking ahead, we will continue our focus on advancing our pipeline expeditiously and executing on key anticipated milestones in the second half of 2021. We reiterate guidance for the expected clinical, regulatory and preclinical milestones in the second half of 2021, including reporting data from the highest dose cohort from the Phase 1/2 TSHA-120 in GAN, providing a regulatory update for the GAN program, reporting preliminary Phase 1/2 safety and biomarker data for TSHA-101 in GM2 gangliosidosis and initiating Phase 1/2 trials in CLN1 disease, Rett syndrome and SURF1-associated Leigh syndrome.

I would like to give special thanks to the continued support and dedication of our Taysha employees, board of directors, Scientific Advisory board, collaborators, UT Southwestern and the patients and advocates who remain our motivation every day to continue our mission to develop curative gene therapies. I will now ask the operator to begin our Q&A session. Operator?

Questions & Answers:

Operator

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

Unknown speaker

Hey. Good morning, guys and thank you for taking our question. This is Elizabeth on for Salveen. Just wanted to ask if you could provide a little bit more color on the nature of the pre-IND and CTA positive feedback you've gotten from regulatory agencies? And then just, I guess, more broadly, what are some of the venues that Taysha could present the data into -- in the second half of 2021? And just Taysha's approach to data releases on the forward?

RA Session

Sure. Thanks, Elizabeth and good morning. What I'll do is I'll take the first question and then -- I'm sorry, I'll take the second question and then we'll throw the first question to Suyash to give some color around some of our recent discussions with regulators. Essentially, our approach to releasing data is either going to be primarily through press release and/or doing an investor call.

As you recall, we've done a number of kind of these mini investor days over the last few months. First is our R&D Day. The second was a manufacturing day. We have the CLN1 investor day coming up here in the next few weeks and that will be followed by our Rett syndrome investor day and then our Angelman investor day.

And so depending on the timing of when the data is going to be available to release. We're either going to do it through a press release, which we would obviously press release it anyway, but to provide some additional color we may do a call around that as well. So more to come, but certainly exciting times for the second half of the year. Suyash, maybe you want to provide just some general color around some of our regulatory interactions over the last few months, primarily the number of interactions that we've had over the last few months.

Yeah.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Yeah. Thanks, RA. And thanks for the question, Elizabeth. We've had a very, very hectic schedule of regulatory activity over the past few months and that was purposeful.

We, as you know, with our approach to regulatory engagement, we're filing in multiple jurisdictions for each of our programs. So we've probably had close to 10 regulatory interactions, which included the FDA and several other countries. And in general, they've been very, very good. The tone has been collegial.

We've been able to answer all their questions. There's been very few surprises along the way. I think it would be fair to say that the actual discussions themselves, we focused on a few topics of note and I'll bucket them to three categories. One is CMC and a large part of that is potency acid testing.

And once again, we have a very similar approach across our programs. We have a very disciplined way of looking at potency. We start all the word early. So that discussion goes well and there's no general surprises there.

On the nonclinical side, we have a very robust package of toxicology across all our programs, which include a combination of mouse chronic tox rate per six month tox and NHP tox, which could be three to six months. And in general, most of the agency is very favorable there. There's a few slight differences in what the expectations are, i.e., some agencies want a little more in terms of species and duration of time and some agencies want a little bit less. And as we all know, the FDA tends to be a little more conservative.

But once again, our plans are very robust and comprehensive. So the multiple agencies are generally very favorable for those. And the third bucket of question usually tends to be around clinical sub design and endpoints. And once again, we've had -- we give a lot of thought to our end points.

We weave in feedback from patients and families, feedback from key opinion leaders and we write the protocol in a very disciplined way. We make sure that the majority of our developmental progression assessments are videos and that adds on to our robustness to the studies. And so once again, those discussions go well also. So lots of interactions, lots of very good interactions and we have a few more yet to come.

But I would say that there's been really very little surprises and the engagement has been collegial and very positive thus far. In fact, one of the agencies have said to us at the last meeting, we're looking forward to seeing you next time. So I think that's really just signifies the tone of the conversations.

Unknown speaker

Great. Thank you so much.

Operator

Thank you. Our next question comes from the line of Joon Lee with Truist Securities. Please proceed with your question.

Joon Lee -- Truist Securities -- Analyst

Hi. Thanks for taking our question and for the update. So the Rett syndrome, which is a relatively larger indication and a really interesting one, you guided to clinical data by year-end '22, but no mention of any biomarker data released in the press release. Are you skipping -- are you planning to skip the biomarker data disclosure altogether in favor of the initial clinical data? This one just stood up to us given the planned biomarker data disclosures for the other programs.

And also, is your microRNA active response element, something that is patented or is this more of a -- is protected by in-house know-how? And I have a quick follow-up after that. Thank you.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Sure. I can take the question on the biomarker data and then RA can talk about the IP. With regards to the biomarker data, it's a great question, Joon. I really wish we had a good biomark for Rett syndrome.

Many, many scientists and expert clinician physician, scientists have been looking for a biomarker for this particular disease. But sadly, there isn't a good blood-based biomarker or a good CSF biomarker. I think with regard to biomarkers, the best biomarker that we have, which is not very good, it is probably EEG. The EEGs of children with rotarod normal and it's possible that we'll see a modification in the EEG as an early read on the biomarker -- of activity of the drug.

But it's not really a very good, very established, very robust, well-accepted biomarker, which is why we don't specifically guide that biomarker data. But if something looks interesting early we will plan to share it. I mean I think the best hope for Rett is really to see what we see from a safety perspective and then from a efficacy perspective thereafter. We are, however, collecting blood and CSF and performing full metabolomics and proteomics analyses.

So if something does crop up as an interesting useful biomarker, then we will see it there. I don't hold much hope for that, frankly, because many, many experts have been looking for biomarker for a long time. So ultimately, we do -- we are guiding to enrolling in the study, start in the study by the end of this year and clinical data by the end of 2022. And I'll hand over to RA now for the IP question.

RA Session

Sure. Thanks, Suyash. And Joon, thanks for the question. Good morning.

So our miRARE platform is covered by strong intellectual property. We're pretty excited about that and the broad applicability of the platform to not only show genotypic MECP2 expression on a cell-by-cell basis but also the ability to exploit this platform for other indications where there may be a dose sensitive nature to the protein. And so there's a really nice correlation to this in a lot of other disease areas, Fragile X being one of them. Angelman being another, Pitt-Hopkins, FOXG1.

So there's a number of these where you have the potential to either use the exact same microRNA binding sites to build into another transgene or to pick a new subset of microRNA binding sites to -- depending on the disease itself. So we're actually pretty excited about it. I think it is something that significantly differentiates our approach to others. And if you recall, our approach to gene therapy is really to use validated gene therapy technology, coupled with very targeted payload design.

So the validated piece, AAV9 intrathecal delivery, HEK293 suspension but really innovate around payloads and miRARE being an important piece of that. And so as we continue to build out the data set in other disease areas, obviously, we'll continue to expand our IP estate around that.

Joon Lee -- Truist Securities -- Analyst

Excellent. Thank you. And just a quick follow-up for all your programs, given they all use the AAV9 vector, are your starting doses for all the other programs comparable? And is your dose escalation strategy also comparable between programs? Thank you. 

RA Session

Really, really, good question. And I think it speaks to this platform approach. And again, our approach to using kind of this validated technology and using that and exploring that in multiple indications. Suyash, maybe you want to give some thoughts there.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Sure, I can. It's a very good question. And in general, I would say, yes, we are approaching the first dose for each patient in each program. We're ending up in a relatively similar ballpark of around 5E14 total vg, which as you know, is a high dose be directs the brain and spinal cord with a low dose in terms of systemic exposure for in compression to systemic drugs, which are dosed vg per kilo.

What I would -- where I would say the programs differ a little bit is how aggressively we can accelerate or escalate the doses thereafter. And it depends on a couple of things really. The most important thing it depends on is the therapeutic window that we have. And for several of our programs, we actually have a very broad therapeutic in window, for example, CLN1 or GM2 where you have a secreted enzyme, so where you actually can -- a little bit of enzyme goes a long way.

But on the converse side, actually overproducing enzyme in supraphysiological quantities actually has no impact as detrimental whatsoever. So for those programs, we can accelerate and escalate the dosing quite rapidly. But then there are programs such as Rett where, as you know, there's a relatively narrow therapeutic window and we have to be a little bit more cautious in accelerating or escalating the dose, despite the fact that we have the miRARE platform, which self regulates the proportion of MECP2 that's being produced for Rett. So I would say that we generally start in the same ballpark, but then as we escalate the doses higher, we do that in a slightly different rate dependent on the therapeutic window we have for each program.

Joon Lee -- Truist Securities -- Analyst

Thank you.

RA Session

Thanks, Joon.

Operator

Thank you. Our next question comes from the line of Laura Chico with Wedbush Securities. Please proceed with your question.

Laura Chico -- Wedbush Securities -- Analyst

Good morning, guys. Thanks very much for taking my question. My first one, I was just wondering if you could spend a minute on the loan agreement and perhaps why you think this makes sense now? And just wanted to clarify, how does that change the cash runway estimates? And then my follow-up, just around expectations for the 35E14 dose in GAN. You'd already seem to have an effect at the lower doses.

So just trying to understand, which doses or dose would be advanced commercially?

RA Session

Hey, Laura. Good morning. What I'll do is I'll take the first question around the nondilutive financing and then Suyash, we'll turn it over to you for GAN around dosing. So the way that we think about this and kind of from a timing perspective, we felt really strongly that we had the opportunity in an environment where the cost of capital is at historically low rates, the ability to add this finance.

And particularly, we're in a situation where the equity capital markets are somewhat volatile and not necessarily accurately valuing innovative gene therapy companies. And because we have such a robust portfolio, a number of programs in the clinic, a number of data readouts here to come later this year and kind of for the foreseeable future and even the opportunity to -- the opportunity to reach a GAN approval without the need for additional financing, we thought this was as good a time as any to bring on this nondilutive capital. I think a couple of things that we talked about is the terms of this deal were quite attractive. We talked about a 7% interest rate, which is a historically low interest rate.

We talked about no financial covenants, no warrant coverage. This is about a clean deal as you can get in a single partner to be able to do this with and one that has the credibility, I think, of the name that goes along with it in Silicon Valley Bank. And so for us, it's all about optionality. It's all about being able to move things best-in-class forward and not necessarily have to slow anything down or make any particular trade-offs as we get into the next year.

And because we can't predict what's going to happen in the equity capital markets, we thought this was just a wonderful opportunity to be able to add some additional dry powder to the tank. That's literally it. And we were pretty excited about, again, being able to announce this deal partnering with SVB and being able to get into the second half of this year with multiple data readouts. We're talking about GAN high-dose data, regulatory feedback around registration pathway on GAN, GM2 gangliosidosis, safety and biomarker data, CLN1 first patient dose, Rett syndrome open clinical trial, right? Just more and more of these to come.

So I'll pause there and turn it over to Suyash. And Suyash, maybe you want to talk about the 1.8E to the 14 total vg dose versus the 3.5 to the 14 total vg dose.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Absolutely. Thanks for the question, Laura. Yes, you're right. As the 1.8E14 dose looks very, very, very, very good.

We see clear stabilization of disease progression at that dose. We have patients out just quite some contributable time at that dose, so showing sustainability of effect. And that improvement is clinically relevant, clinically meaningful, i.e., it halts the eight point decline in the MFM32 scale, which translates to an eight point improvement every year, 16 points over two years, etc. And also when you run the basin analysis and we have these slides in our corporate deck.

We know that 1.8E14 dose patient who is dosed will have a 98.1% chance of a clinically meaningful improvement. So it's a really solid dose and the drug would frankly be approvable on that dose. What I will say is that when Carsten Bönnemann at the NIH and this is a study that's been run at NIH. And for several years, has been run very, very nicely.

Carsten initially set out to rather other dose response to be going all the way up to 3.5E14 total vg. Now three patients have actually been dosed at a higher dose and we will have data to share on the one year time put on those three patients in the second half of this year. And my guess is that those patients will either show at least the same as the medium high dose of the 1.8E14 or be slightly better. And for these children with this relentlessly progressive neurological deterioration toward death, you have to give them every best chance of having the most significant clinical benefit.

What I will say is that as we approach our regulatory meetings toward the end of this year, we have this really wonderful data package. We will have the 3E14 dose as part of the package. And as you know, we have this great natural history study. We have dose responsiveness.

We have clear stabilization of the disease at the medium-high dose. I expect there will be at least the same in the high dose. We have long-term safety, long-term efficacy, long-term durability. So I'm looking forward to having those decisions with the regulators.

But in terms of commercializing, I think likely it will be the 2.5E14 dose. But as I said, the 1.8E14 would probably be more than enough as well. Let me stop there. Thank you.

Laura Chico -- Wedbush Securities -- Analyst

Thanks.

Operator

Thank you. Our next question comes from the line of Gil Blum with Needham & Company. Please proceed with your question.

Gil Blum -- Needham & Company -- Analyst

Good morning, everyone and thanks for taking our question. So do you guys have any thoughts on the recent lifting of the Zolgensma clinical hold on the IT administration? And do you think this is just a change in the way the FDA views the risk benefit for IT AAV gene therapy? And I have a follow-up.

RA Session

Gil, good morning. Maybe I'll start and Suyash, please provide some additional comments. I think for us, we were really excited to actually see that news come out about a week or so ago that not only did the FDA lift the clinical hold on the IT formulation for Zolgensma, but also the fact that Novartis were going to be conducting a Phase 3 study in the Type 2 and 3 patient population. And again, I think we've seen the data from the original study where Zolgensma demonstrated a significant improvement in the Hammersmith essentially twofold over what would be considered clinically meaningful that was sustained, safe and effective in the patients that were treated with the intrathecal dose.

And so we were quite excited by that. We felt like the clinical data, both from an efficacy perspective but also from a safety perspective supports it. And again, when you think about the totality of data, particularly around the combination of AAV9 enterthecally, we think, again, this is an extremely effective way and route of administration to be able to deliver directly to the CSF. This has been demonstrated in our very own giant axonal neuropathy study, but also in the Amicus CLN6 trial, which has had phenomenal data.

Their recent CLN3 studies. And then again, we talk about Zolgensma. And so from a regulatory perspective, I believe the clinical hold was lifted based on some NHP toxicology data that the agency asked Novartis to conduct and so I think, again, the fact of the matter that they conducted those additional toxicology results, the fact that Zolgensma has now been in well over 100 -- sorry, 1,400 patients globally, I think, really speaks to the safety and efficacy of using AAV9 as a gene therapy approach for the treatment of monogenic CNS diseases. And so again, I think this kind of mirrors some of the recent feedback we've gotten from the agency, where they've taken a very pragmatic approach to your toxicology package and then the fact that we go in with three species of COX in most cases, this dovetails nicely with what they're looking for.

I'll stop there. Suyash, I know you probably have some additional comments.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Sure. Thanks, RA and thanks, Gil, for the question. I think that we've a year, year and a half where the FDA has seeming to have been clamping down with clinical holds both for safety matters and for CMC-related issues in the AAV gene therapy space. I do wonder if that's changing now.

Actually, we have the Zolgensma hold lifting recently. And this morning, we also announced the lifting of the hold once again, AAV9 gene therapy for Danon, the Rocket Pharmaceuticals' program. So I wonder if there's been a bit of a shift in the perspective of the FDA and they're just getting a little more comfortable spending less time on COVID and more time on gene therapy now. I think specifically with our Zolgensma product, it's definitely transferable to the wider AAV9 space.

It's good news for AAV9. As RA mentioned, the clinical data from that intrathecal study, the strong trial was actually very, very positive. We saw clinically meaningful effects on the Hammersmith scale, which is a scale that's used for slightly older children and the CHOP INTEND because actually you're going into SMA Type 2 and Type 3. And the doses are in the E14 ranges.

So once again, you can learn a lot quite translatable to our programs as well. The issues have been for safety that's now listed with the NHP study. Our approach to toxicology, as I've already mentioned, is very robust. And thus far, in our discussions with the FDA, they've been very accepting for it -- acceptable for it.

So I'm hoping this is shifting the FDA's paradigm a little bit. But the fact that Zolgensma came off clinical hold was good news for AAV as was the lifting of the whole for Danon disease this morning as well.

Gil Blum -- Needham & Company -- Analyst

All right. Thank you for all the color. And could you maybe give us an idea of the number of patients that you can currently treat with the GMP runs that you've conducted? Would these be sufficient for your initial clinical studies and the programs that you mentioned?

RA Session

No, it's a really good question, Gil and we appreciate it and that's absolutely correct. When we go in and we do a GMP run, not only are we doing GMP runs for our IND-enabling tox package, but we're also doing GMP runs for the entire cohort of a clinical trial because what we want to do is make sure that there is consistency between material giving to the same patient in a particular indication and not necessarily adding any unnecessary variability into a clinical trial by having a certain set of patients treated with one GMP run and then having another set of patients treated with another GMP run. And so what we can do is because of our capacity, we do have the ability to be able to manufacture GMP material for an entire dosing cohort within a clinical trial. So we're pretty excited about that.

Not only do we have that material, but we also have material left over for routines to make sure that we could do any type of needed analytical comparability between any type of preclinical material that we also keep and kind of put in the freezer to make sure there's always the ability to go back and do analytical comparability or any recharacterization that would be potentially needed to support a regulatory filing.

Gil Blum -- Needham & Company -- Analyst

All right. Thank you for taking our questions and congrats on the progress.

RA Session

Awesome. Thanks, Gil.

Operator

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

Eun Yang -- Jefferies -- Analyst

Thank you. I have a couple of questions regarding 120 on the clinical and regulatory update that we are expecting by end of this year. So will the highest core -- high-dose core data come out before the regulatory update? So that's the first question. And second question is, so you're going to be requesting on end of phase meeting with the FDA and engage you with the EMA by year-end.

So do you think you that would have an update from the regulatory agency discussions or is it possible that you could just request a meeting and waiting for the meeting to happen potentially early next year? Thank you.

RA Session

Good morning and it's great to hear from you and thank you for your question. So I'll take both of these. So from a disclosure perspective, I think it's likely that we would share the high-dose data cohort before we would disclose any particular feedback from any regulatory agency discussions that we plan to have here in the second half of the year. So that is the cadence from a timing perspective.

The goal is to have feedback by the end of the year and not request the meeting by the end of the year. So we'll be putting in those submissions -- those meeting submissions here in the next month or so in order to ensure that we will have feedback depending on the workload of the agency. Obviously, it's up to them when they grant you a meeting. And with COVID, what we've tried to do is to request those meetings early because we know that, in some cases, those meetings can be a little bit delayed.

And so we're going to take a similar approach here from a GAN perspective, particularly in the U.S. where we're going to put in the meeting request in time to receive feedback here by the end of the year. In Europe, particularly with MHRA, from a scientific advice perspective, EMA from a scientific advice perspective, those meetings are a little bit more straightforward, to be quite honest. And those agencies have been granting meetings and somewhat of a normal time period, particularly MHRA, you're able to get a face-to-face meeting with them relatively efficiently.

So that's the way that we're going to approach regulatory interactions here in the second half of the year. And hopefully, we'll have that feedback in time in order to provide an update to the street by the end of this year. But certainly, that's our going-in approach.

Eun Yang -- Jefferies -- Analyst

OK, thank you for the clarity. And I have one quick question on the financials. So in second-quarter R&D, you have decide $10 million in R&D manufacturing and other raw material purchases. So going forward, the third quarter, I mean, second half of this year, should we assume that R&D increases quarter over quarter would be more normalized from second -- the first-quarter run rate or with all the clinical programs are advancing would you expect R&D to increase from the second-quarter run rate? Thank you.

RA Session

Really, really good question. I'll start and Kamran, maybe you want to provide some additional color. I think as we discussed, we've had a number of GMP manufacturing campaigns to support multiple clinical trial starts here in the first half of this year, particularly in the second quarter and those were being conducted in collaboration with our partners over at Catalent. And again, the goal was to have high quality, robust material that we had a high degree of confidence in that would be able to treat our patients effectively.

With the portfolio as large as ours and kind of the way that the programs are kind of running from a cadence perspective, we expect to have a number of new programs move into the clinical development next year as well as a number of programs that are currently in IND/CTA enabling studies that will be moving into -- that will be moving into clinical development as we get into 2022. And so I think you'll see some level of consistency and normalization. But with the breadth of the portfolio that we have, there'll certainly be some growth. I'll stop there, Kamran, maybe you want to provide some additional color.

Kamran Alam -- Chief Financial Officer

Yeah. Thanks, RA and thanks for the question, Eun. So ultimately, as we continue down the clinical trial initiation on numerous programs in our portfolio, you can expect to see some additional clinical trial expenses getting incurred in second half of this year and into 2022 as well.

Eun Yang -- Jefferies -- Analyst

OK, thank you very much.

RA Session

Thank you.

Operator

Thank you. Our next question comes from the line of Raju Prasad with William Blair. Please proceed with your question.

Raju Prasad -- William Blair -- Analyst

Thanks for taking the question. I kind of just want to understand how the kind of commercial scale-up and identification of patients is going, maybe particularly in 120? A lot of questions that we get are kind of related to how big that market opportunity is. So maybe if you could just talk about the number of kind of prevalent patients that you've identified and how you're kind of looking at building up the commercial scale up? And then I got another follow-up.

RA Session

It's a really good question and good morning Raj. And so the way that we're thinking about patient identification, we're actually being quite pragmatic, particularly today. So not only have we brought on our head of -- our chief commercial officer, who led the commercialization of Zolgensma and when he joined Taysha, he was actually the U.S. general manager for Zolgensma.

We've also brought on the leadership team below him, our VP of marketing who was the VP of narketing on the Zolgensma program, our head of payer engagement who also led that effort on the Zolgensma program as well as our head of product distribution, who also led that program on Zolgensma. So first and foremost, it was about bringing on people that knew exactly what they were talking about. That was kind of the first and foremost thing that was important to us. From a patient identification perspective, what we've done is we partner not only with Invitae to a previously announced partnership, which we're continually expanding on.

We've also recently partnered with GDX particularly around basin identification ex U.S. And what we know about this population is that this is really a prevalent population split into two segments, early onset GAN and late-onset GAN. Early onset GAN being kind of the more progressive form of the disease that typically progresses to death around late teens to early 20 and then late onset GAN that typically presents in kind of the teenage years and has a significant quality of life impact, but typically doesn't progress to death. These patients tend to live into their fifth decade of life, albeit it's a pretty compromised quality of life.

And so the majority -- the split between those two populations is about 25%, 75%. 25% being to the early onset GAN, 75% being in the late onset GAN. And because that's the larger population and those patients tend not to progress as quickly where we're really able to build up a fairly large prevalent population. So when you think about this, this is a real prevalent opportunity.

The incidence of these -- the incidents here would be relatively small. We're talking in the U.S. somewhere around 30 or so or U.S. and Europe, somewhere around 30 or so patients.

But the prevalent population is actually quite big. And the late onset patients are all identified but they haven't been genotyped. And I think that's the important piece and this is what we're going to be doing with gene DX is really going out partnering with the CMT Foundation. So we're working through our partnership discussions right now with the CMT Foundation really around genotyping, all the CMT2 patients that are currently in their network of clinics and they've done a fantastic job with the number of validated clinical sites throughout the U.S.

and Europe. And the way you think of that CMT -- the way you would think about the GAN population or the late onset GAN population that is in that CMT -- that's in that CMT group is there's about 4 million births in the U.S. per year. The CMT incidence is about one in 2,200 or 2,200 patients, of which type 2 is about 17% of that.

And then around 6%, it could even be higher, we've seen in some literature. But the number that we actually use for our 2,400 patients is around 3%. But the literature goes and is fully disclosed that 6%. We want to be a little bit more conservative.

But up to 6% of the CMT type 2 population has a confirmed GAN mutation. We've actually seen literature like I said, that gets into the double digits. But this is ultimately how we back calculate our epidemiology and get to the numbers, the 2,400. Likely, the number is a lot higher in Europe -- in U.S.

and Europe, it's probably closer to about 3,000 to 3,500, but we wanted to be conservative with our estimates. Hopefully, that helps.

Raju Prasad -- William Blair -- Analyst

Great. And then with the FDA panel coming up next month, obviously, we've seen some clinical holds come off with Zolgensma as well as Rocket Danon disease program this morning. I just wanted to kind of get your thoughts on how to look at -- how are you guys looking at that that panel moving forward? Thanks.

RA Session

Awesome. Suyash, maybe do you want to take that question?

Suyash Prasad -- Chief Medical Officer and Head of R&D

Sure. Yes. Thanks for the question, Raju. I think, yes, it's going to be interesting.

I'm looking forward to seeing the panel actually interesting how the discussion goes. The way the FDA have structured the panel, they're looking at five specific areas. They're looking at vector integration and oncogenicity risks, hepatotoxicity, thrombotic microangiopathy issues. And the nonclinical front of toxicity especially related to DRG and then clinical front on neurotoxicity based on Brain MRI findings.

So I think we're actually just looking forward to listening and learning. All of those five areas that if they are talking about, we've given us some considerable thought to and have mitigated against them, both by looking at them, looking for some of these issues, specifically in our preclinical work, for example, we look at DRGs in all of our preclinical NHP studies now. And thus far, we haven't seen any signs of DRG inflammation. And not just looking at things from the nonclinical perspective, but you also build in appropriate mitigations into the clinical trial design as well, i.e., we built in monitoring to look for hepatotoxicity issues.

We've built in clinical monitoring to look at platelet counts, which gives a clue to early issues with thrombotic microangiopathy. We look at -- we actually have -- it's been an interesting discussion with the regulators just in general about how to monitor for DRG inflammation over -- in the clinical trial and essentially, we came up with a good plan that the regulator seem very acceptable of, which is looking at reflex testing periodically at each visit. So specifically the six reflexes in the body, ankle, knee, etc. And also nerve conduction studies at baseline and the three month period to the first year thereafter.

So we've been giving this a lot of thought. I'm not expecting to hear anything at this meeting that's a big surprise to us. I am hoping to learn more. I'm hoping it will go into more detail around the mechanism of what's happening.

And I'm also hoping that they take the safety issues that they're thinking about considering and they look at it from the context of the balance of risks and benefits in the patients because once again, for the patient communities that we're trying to serve. These are children who have devastated hoarses with upward rapid progression toward there. And in that context, some minor safety issue should not be, should not preclude a charter being included in the clinical trial or being dosed.

RA Session

Suyash, maybe you want to just comment on some of the recent NHP data that we've obtained in our GAN program because I think this kind of plays into just kind of what's going on in the field.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Sure. And yes, it's a good reminder. All right. Thank you.

Yes, we recently conducted another study in the -- for our GAN program, specifically an NHP study that looked at our redosing approach. But as part of that assessment, we actually gave a clinically meaningful dose of GAN vector and redose these NHPs, redosed some of these NHPs eight weeks subsequent to dosing. And we took on all the NHPs, those that received both 1 dose and those that had received two doses. And we looked very carefully for any signs of toxicity or inflammation in the new proxy.

And with a specific focus of course there's lots of interest in the DRG and spinal cord and neural tissue. So no evidence whatsoever of any kind of information in any of the samples we took. So from our perspective, it was very reassuring and it's specifically a vector is already in the clinic at the moment for us.

Raju Prasad -- William Blair -- Analyst

Great. Thanks.

RA Session

Awesome. Thanks, Raj.

Operator

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

Yun Zhong -- BTIG -- Analyst

Hi. Thanks very much for taking the question. So first question on GM2 program. Do you expect the biomarker data to include substrate reduction? And how long do you think the patient will need to be followed for you to see any signals suggesting clinical efficacy, please?

RA Session

Yun, good morning. Maybe I'll take the first question and Suyash can take the second. From a data disclosure perspective, what we're expecting to disclose will be a safety data from the Queen's Phase 1/2 study as well as HEXA enzyme activity data from the CSF. Those will be the two measurements that we'll be disclosing.

And then in subsequent disclosures that we've moved into first half of 2022 and then later in 2022, we'll be providing some additional disclosures around other key aspects of the disease. But for the second half of this year, those will be the two markers that we'll be providing feedback on. Suyash, maybe you want to take Yun's second question around your second question around kind of timing of when you would see kind of clinical impact?

Suyash Prasad -- Chief Medical Officer and Head of R&D

Sure. Thanks, Yun for the question. I think it's an important question, just the cadence of events, what's going to happen after we dose a patient with GM2. What's the normal course? What's the expected course of events.

So RA is quite correct and that the biomarker data we will be showing will be HEXA levels in the CSF and in the blood. You asked specifically about GM2 ganglioside reduction. We are of course measuring that. My guess is that will take a little bit longer than the HEXA to change.

And so that will be the results of a late disclosure. And in terms of clinical improvement, my hope is that -- I anticipate -- if you think about the cadence of events, you dose a patient you should get much more transient expression, maybe three weeks after dosing. So I guess by the first month, you should be seeing a nice increase in the HEXA activity. And then by three months after initial dose it should be maximal.

My guess is that the clinical stabilization, you wouldn't start to see until about three months. I would hope to see the beginnings of some change in clinical progress by about three months. It may take even longer, it may be six months. But my guess is that three months we'll start to see the signs of symptom.

Yun Zhong -- BTIG -- Analyst

OK. And then on the Rett syndrome program, do you have a target range that you hope to see that the gene transiting expression will fall into that range or would you just rely on the self-regulatory mechanism of the technology to look more on the clinical kind of the end point, please?

Suyash Prasad -- Chief Medical Officer and Head of R&D

Yeah, so this is very good.

RA Session

Another good question. Go ahead, Suyash. Yeah, that would present the data safely but go ahead, please.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Well, I'll start RA. You jump in if I miss anything out. It's a really good question, Yun. and it's been -- we've had a number of advisory votes for Rett and we've asked everybody the same question, what is the -- what is our range of MECP2 expression? Is it -- do we need to get exactly 100%? Is it between 80% and 120%? What's the upper limit? We know that 200% is too much because you get MECP2 duplication.

But there's 150% levels OK. And none of the clinicians can answer that. What I will say is that in the animal studies, when you hit about 150%, that was a MECP2, you are starting to see some kind of deterioration. But our intent is to try and keep the level of MECP2 generally physiological, i.e., about normal, being a little bit more conservative.

The way Steve Gray has designed the microRNA binding sites, they just -- they run a little bit lower, lower than 100%, so between 90% and 100% levels of expression. Now of course, we can't measure a MECP2 expression NHR because in order to do that, you'd have to buy up to the brain and look at levels of MECP2 expression. So it's technically possible, but ethically, you wouldn't be able to obviously take that biopsy except of course in the unfortunate NHR was to die would perform an autopsy and get the data that way. But we wouldn't be able to measure MECP2 expression in the clinical setting in the vast majority of cases.

And so we're going to be relying in particular on clinical improvement. But the target is going to be physiological levels, which the self-regulatory feedback loop is able to attain very, very nicely.

Yun Zhong -- BTIG -- Analyst

Great. Thank you.

RA Session

Thank you.

Operator

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

Mike Ulz -- Morgan Stanley -- Analyst

Hey, guys. Thanks for taking the question. Just for the GM2 program, hear you're on track to give an update sort of later this year. But assuming you get positive results there, are you planning to advance a single dose into the Phase 1/2 U.S.

study or might you decide to advance multiple doses there? And then secondly, do you need to make any process modifications to the material you plan to use in the U.S. study versus the material that you're currently using in the Queen's study? Thanks.

RA Session

Hey, Mike. Thanks for the question. I'll take the second question and Suyash maybe you want to talk about dosing. But to your second question, the material that we produce for the Canadian study is made in the exact same facility with the exact same process that the U.S.

clinical trial material is being manufactured with. So that will be the exact same like-for-like material with the same analytics, same product characterization, same release testing. So we're pretty fortunate for that. And the reason why we do that is to make sure that if we do see a remarkable result that we're able to take that to regulators and then start to have discussions around regulatory pathway relatively quickly versus having to go back and do some type of process development change.

So that -- so to your original question, that's the exact identical material from the same facility, same process. Suyash, maybe you want to just talk about dosing.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Sure. Yeah thanks for the question, Mike. And the good thing about GM2 is one of the programs that has this very wide therapeutic window that I've already touched on, i.e., you don't need much to get a significant improvement. We assume 5% levels of enzyme will be more than enough to result in dramatic improvement.

And I say this based on the current data that exists that show that infants for the disease have less than 0.1% activity at HEXA. When you go up to about 2% to 3%, i.e. the adult forms of the disease, they actually have a normal life span by that. So if you're hitting 5%, then more likely, that will be enough to give you quite a dramatic clinical improvements.

So you don't need much to get to a level that results in considerable clinical improvement. On the other end, you can actually express the enzyme super physiologically and we've seen this in our toxin pharmacology, preclinical work. And it's a very safe enzyme. So you can actually express it super physiologically on the other end.

And there are no adverse consequences there. So we have a very broad therapeutic window. Now to give you some context, 5E14 total vg is a high dose being given intrathecally, but it's a relatively low dose in comparison to systemic administered gene therapies. So we actually think that we're likely to have quite a significant benefit with our 5E14 dose.

Now, if we're seeing a good benefit in that 5E14 dose from a biomarker perspective and more important from a clinical perspective, we will probably just go ahead with the 5E14 dose in the in the U.S. study and file on that data. If indeed, we think there's room for improvement, we have absolutely the opportunity to go higher if we need to. And my guess is we'd probably go from a 5E14 to 1E15 total vg.

So we have that possibility of doing that. The study designed for the U.S. is not fully finalized yet and I think it's fair that we're going to learn a little bit from the Canadian study before we actually finalize the design of the U.S. study.

But 5E14, I think, is likely to be good enough. But if there's any potential room for improvement, we absolutely haven't scoped to cut to the 1E15 dose.

Mike Ulz -- Morgan Stanley -- Analyst

Great. Thank you.

RA Session

Thanks, Mike.

Operator

Thank you. Our last question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Kristen Kluska -- Cantor Fitzgerald -- Analyst

Hi. Good morning. Thanks for taking my question. For the GAN program, could you please discuss what you hope to see on some of the assessments beyond MFM32, including muscle strength and brain imaging, especially in light of the understandings and the correlation that were reported with MFM32, including in the recent Brain publication? And I guess, specifically, what signals would help you further validate that the gene therapy is slowing down the disease progression? Thank you.

RA Session

Hey, Kristen. Good morning. Suyash, I'll turn it over to you. I think probably some of the best data that we have is something that we just recently shared, particularly around visual acuity.

I think that particular end point is going to be extremely clinically meaningful to patients because it's such a quality of life endpoint. And Suyash maybe touch on that and then some of the other endpoints that Kristen discussed.

Suyash Prasad -- Chief Medical Officer and Head of R&D

Sure. Thanks for the question, Kristen. And I could probably spend a good 10 or 15 minutes talking about this. There's such a wealth of data being collected in this NIH study, it's really remarkable.

So we've seen the MFM32, which is -- I always describe it as a CHOP INTEND for older children. You've got three domains looking at central strength, proximal muscle strength at arms, shoulders and hips and distal strength fingers and toes. And we see clear stabilization of disease at the medium, low and the medium-high dose in this progression. MFM32 drops by 8 points a year in kids with GAN.

This is a clinically significant decline every year. Four points don't forget is deemed to be clinically meaningful and we showed clear stabilization of disease at that medium, low and the medium-high dose. In conjunction with that as RA has mentioned, we have now presented some data on vision and visual acuity. And specifically, we look at something called the logMAR scale, LOGMAR.

And this is a bit like the Snellen chart. When you get to the optician, you sit there and you read the letters off the wall. The logMAR does this but in a more rigorous kind of research-focused manner. And what we've seen in patients that have been treated, we've seen a dose response difference in stabilization to logMAR.

So children who have GAN, their vision deteriorates over time. And it's one of the most significant, most worrisome clinical effects. I think one of the things that parents or friends worry about so much the fact that child loses their ability to see because more than anything it means they stop being able to communicate in the same way as they also lose their ability to articulate words and hear, for example. So it's very troubling from a patient and family perspective.

And what we see and there's a nice slide in our corporate deck now, you see that a logMAR score of about 0.3 is when you need glasses, score of about 0.6 is when you have significant visual deterioration. When you're hitting about 1.3, that's when you're legally registered as being blind. And from the vast majority of patients, apart from one outlier in our data set, the logMAR deters over time and progresses toward blindness. When you treat you actually halt the decline.

So it's similar to the MFM32 where visual acute is declining, you treat and then suddenly it stabilizes out at the level of function. So your preserving vision for the duration in these children. Certainly, we've seen a significant duration of visual preservation in this particular study. So vision is key.

In terms of other endpoints, we're looking at neuropathy type scores. We're looking at sensation. My guess is that sensation is going to improve or stabilize, but it's one of those parameters that's quite hard to measure. You also alluded to muscle strength.

My guess is that muscle strength will also improve. Already stabilized the ongoing deterioration in myometry will stabilize and I think that's also true for some of the other motor assessments such as the timed, tell me to walk test, they send you four step, five, etc. And Carsten and the team were also looking at respiratory muscle strength and I anticipate once again that the forced vital capacity will stabilize, the way the MFM stabilizes out. And I say these things with confidence because all of these assessments are highly, highly correlated in the natural history study in the Brain paper that you mentioned earlier.

Now in addition to the clinical measures, we're also doing a number of tests in the study as well. So we're performing nerve conduction studies, i.e., looking at electrophysiology, looking at MRI scans. And also importantly, we're performing biopsies in these patients, too. I am looking forward to seeing how the data pan out, but my guess is the vast majority will reflect in there, what we've seen is the MFM32.

Kristen Kluska -- Cantor Fitzgerald -- Analyst

Great. Thank you for taking my question.

RA Session

Thank you, Kristen.

Operator

Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Session for any final comments.

RA Session

Thank you, operator and thanks, everyone for joining the call today. We look forward to building on the momentum ahead until the end of this year and we'll continue to keep you updated on our progress throughout the remainder of this year. Operator, we'll turn it back over to you.

Operator

[Operator signoff]

Duration: 84 minutes

Call participants:

Kimberly Lee -- Senior Vice President of Corporate Communications and Investor Relations

RA Session

Suyash Prasad -- Chief Medical Officer and Head of R&D

Kamran Alam -- Chief Financial Officer

Unknown speaker

Joon Lee -- Truist Securities -- Analyst

Laura Chico -- Wedbush Securities -- Analyst

Gil Blum -- Needham & Company -- Analyst

Eun Yang -- Jefferies -- Analyst

Raju Prasad -- William Blair -- Analyst

Yun Zhong -- BTIG -- Analyst

Mike Ulz -- Morgan Stanley -- Analyst

Kristen Kluska -- Cantor Fitzgerald -- Analyst

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