Taysha Reports Positive Rett Results to Overcome Challenges

Taysha Gene Therapies has recently spotlighted promising early-stage data for its gene therapy meant to address Rett syndrome, which has now become the company’s primary focus following significant strategic shifts. The company downsized its staff by 35% and shelved other projects in favor of concentrating on this single program. If the therapy succeeds, it could position Taysha in a highly lucrative billion-dollar market.

The early-stage findings cover only four patients from a Phase I/II trial of Taysha’s AAV9 gene transfer therapy known as TSHA-102. Taysha’s pivot to Rett syndrome came after a patient death in 2022 related to its experimental gene therapy for Sandhoff and Tay-Sachs diseases. Although the death wasn’t linked to the therapy, the incident adversely affected the company’s stock and led to the program’s termination. Consequently, Taysha redirected its efforts towards Rett syndrome.

Should TSHA-102 prove effective, the market may hold significant financial potential for the Dallas-based biotech. Analysts estimate there are between 16,600 and 25,800 patients in the U.S., translating to a market value of approximately $2.5 billion. Experts indicate that Taysha could capture around $1 billion in peak revenues by 2035 if the therapy progresses as planned.

“There’s a clear need for something better that could give these patients a real chance at having a more normal life,” noted Maury Raycroft, an equity analyst at Jefferies.

After the 2022 patient death, Taysha declared it would concentrate on Rett syndrome and giant axonal neuropathy (GAN), pausing other research and development activities and cutting a significant portion of its workforce. In 2023, the FDA’s request for more patient dosing data to support a Biological License Application for its GAN therapy, TSHA-120, led to further delays. Ultimately, the company decided to cease all development of TSHA-120 and channel its resources exclusively into TSHA-102 following a Type C meeting.

The results reported in June were based on two cohorts. Pediatric patients exhibited improvements in motor skills, communication, and reduced seizure rates. Adults in the trial saw similar outcomes, with one patient experiencing normal sleep for the first time in two decades. No severe adverse events were reported during the trial, according to Taysha.

However, Raycroft emphasized that the data are preliminary and involve a small sample size. Feedback from investors also pointed out that the assessment scales used by Taysha didn’t show consistent trends. Raycroft stressed that these scales are derived from caregiver and clinician evaluations, and he values the clinicians’ insights more. He perceives this as a positive beginning for Taysha and anticipates that higher dose data will be available in the latter half of the year. “I think the adult data is potentially even more meaningful, based on this update, because we’re seeing data after one year for one patient, and then half the year for the other patient, and both of those patients seem durable, at a minimum.”

Raycroft also highlighted that smaller biotechs like Taysha might need to cut programs and jobs to conserve capital and bring a product to market. He mentioned that prioritizing the Rett therapy is Taysha’s best chance to achieve this goal. He drew a parallel with Reata Therapeutics, which focused all its efforts on its Friedreich’s ataxia drug Skyclarys, ultimately leading to FDA approval and acquisition by Biogen.

With the recent positive data, Taysha aims to secure additional funding and recently announced a public offering of over 14 million shares, expected to generate around $75 million. According to SEC documents, the proceeds will be allocated to the clinical, regulatory, and manufacturing development of TSHA-102.

Raycroft said, “Taysha is focused on reducing their expenses and ensuring every dollar spent advances the Rett syndrome program because this is their best option at reaching that pinnacle.”