Months after narrowing its focus and laying off over a third of its staff, Taysha Gene Therapies is forging ahead on two treatments for rare genetic diseases as it stares down the end of its current funding runway.
The Dallas biotech company could bring one of those therapies, for a disorder called giant axonal neuropathy, to market as early as the end of 2023, CEO and president RA Session II told investors in a recent call about the company’s financial results.
That would be a major milestone for Taysha, which launched with an explosive start two years ago that saw it go public in a mere five months. It raised hundreds of millions of dollars from its IPO and private investors.
But Taysha now only has enough cash to continue its research and work on a new manufacturing facility until the middle of next year, with its long-term ability to meet financial obligations uncertain, the company said in regulatory filings. Executives plan to seek additional financing, collaborations or licensing agreements, but those have yet to be finalized.
“These conditions and events raise substantial doubt about the company’s ability to continue as a going concern,” according to its regulatory filing.
Taysha’s filing said the company has enough cash to cover operating expenses until late next year, but needs more capital for other costs like manufacturing activities and research into product candidates.
Taysha representatives weren’t available for an interview to discuss the company’s drug tests and finances, said chief corporate affairs officer Kimberly Lee in an email to The Dallas Morning News.
Clinical data found that one of Taysha’s therapies led to an improvement in indicators of nerve function for patients with GAN, a very rare disorder that affects the nervous system and is ultimately fatal. The company expects to get more regulatory feedback on the therapy by the end of the year, including from the Food and Drug Administration.
The company’s GAN data is “probably one of the most robust packages” of clinical evidence for a rare disease treatment, Session told investors on the Aug. 11 call.
The company is on track to launch the drug in late 2023 or early 2024, Session said. That tracks with the timeline he laid out in 2020 for first launching a drug.
Taysha also received promising results in mice for a therapy targeting another disease, Rett syndrome. The company is studying that drug in humans.
“We’ve been quite excited about the progress that the company has made across our core programs in giant axonal neuropathy and Rett syndrome,” Session told investors.
A rising star’s headwinds
Taysha launched in 2020 as a partnership with researchers at the University of Texas Southwestern Medical Center, a university that plays a central role in Dallas’ burgeoning biotech sector. The company aimed to eradicate rare genetic diseases that disproportionately affect children.
It brought heavy executive firepower to its board and mission.
Session, Taysha’s founder, is an entrepreneur with stints at Johnson & Johnson, AstraZeneca, BridgeBio and Plano-based Reata Pharmaceuticals on his resume. He brought in investors and former co-workers from AveXis, a biotech company that sold for $8.7 billion in 2018 to pharmaceutical giant Novartis. He was AveXis’s senior vice president of corporate strategy and business development.
Taysha went public in five months, raising $157 million on its first day of trading in September 2020.
“We have such an ambitious plan,” Session said at the time. “We have 18 programs that we’ll be moving into late pre-clinical studies or into early discovery.
A year and a half later, Taysha pulled back and narrowed its operations to make its cash last longer.
The company’s research-and-development costs had ballooned to $131.9 million in 2021, up from $31.9 million the year before. On the whole, Taysha lost $174.5 million last year.
It zeroed in on therapies for GAN and Rett syndrome in March, limiting its other drug-development initiatives and laying off 35% of its workforce, or around 60 people.
That meant shifting away from a gene therapy for GM2 gangliosidosis, also known as Tay-Sachs disease or Sandhoff disease, that was already in a clinical trial. A patient had died during that trial, though an independent safety board ruled the death was unrelated to the drug being studied.
The move cut costs and extended Taysha’s cash runway to the fourth quarter of 2023, the company estimated at the time. Taysha spent $23.1 million on R&D from April through June this year, compared to $30.6 million for the same three-month period last year.
Many biotech companies’ valuations have taken a beating since early 2021, and dozens have announced layoffs this year. Yet investors have shown more optimism lately, in part due to encouraging results in some high-profile clinical studies.
Taysha’s stock closed at $3.16 Friday, down from over $30 in January 2021. The company had $66.2 million in cash as of June.
Promising results
Taysha chose to focus on the GAN therapy because of how far the company had gotten in regulatory discussions, and the Rett therapy because of the opportunity it represented, Session told investors in March. There are over 350,000 Rett patients worldwide, he said, and Taysha’s drug would be the first gene therapy on the market for the disease.
Its treatments for GAN and Rett syndrome are both AAV9 gene therapies, which use a virus to deliver a copy of a gene into a patient’s body.
Gene therapies usually target diseases caused by mutations in one gene, delivering a new copy that works as it’s supposed to, said Baley Reeves, associate director of the National Center for Therapeutics Manufacturing.
“You have a bad copy, you have a good copy, the good copy starts making whatever it’s supposed to be doing, and then you can kind of cure a disease,” Reeves said.
GAN causes motor function to deteriorate over time and impairs cognitive development. It arises in children and is eventually fatal, often by the time people with the disease reach their teenage years. It’s also extremely rare — Taysha cites estimates that the worldwide patient population for treatment is about 5,000 people.
Rett syndrome arises almost exclusively in young girls and causes physical and cognitive developmental issues.
The FDA has given Taysha’s therapies for both diseases its orphan drug and rare pediatric disease designations aimed at incentivizing companies to develop treatments. The therapies have orphan drug status with European regulators.
Taysha is seeking accelerated approval of the GAN drug in the U.S. and conditional approval in Europe, company leaders told investors. If the therapy is approved on the company’s timeline, Taysha could bring its first product to market just under four years after the company launched.
Getting to commercialize a drug is the payoff on a long-term gamble, said Reeves, who is not affiliated with Taysha. Fewer and fewer drug candidates make it through each stage of the development process — and the ones that make it to the market have to pay for the ones that don’t.
Commercializing drugs for rare diseases presents a new set of challenges, said Ted Price, a neuroscience professor at the University of Texas at Dallas. Price co-founded biotech startup CerSci Therapeutics to develop non-opioid pain relief therapies. It sold in 2020 for $52.5 million.
“There’s ethics around how much you can charge somebody for a lifesaving treatment,” said Price, who also is not affiliated with Taysha.
Still, orphan drugs can be lucrative.
AveXis’ gene therapy for spinal muscular atrophy was priced at $2.1 million for a one-time injection, making it the most expensive drug ever. Those kinds of prices may be worth it if they help treat children and reduce the overall cost of their care, scientific analyst Lauren Tyra told The News when Taysha launched.
And even if a drug doesn’t become a blockbuster, the proof of concept it offers for other treatments can be important in the biotech sector, Price noted.
Price said Taysha’s turbulence is unfortunate.
“In my book, the Taysha folks are doing really heroic stuff,” he said. “These diseases are very, very profound in terms of how they change the children’s lives.”
