Q4 2019 Earnings Call
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Greetings and welcome to the Bellicum Pharmaceuticals fourth quarter and full year 2019 financial results and corporate update conference call.
This time, all participants are any listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
I like to turn the conference over to your host Mr., Stephen Jasper from Westwicke I see our please go ahead Sir.
Thank you.
Good afternoon, everyone and thank you for joining the call.
With me today on the call is Rick Fair that becomes President and Chief Executive Officer, and Autobody Macquarie Chief Financial Officer later during the Q when a session Aaron Foster head of research will also be available.
Earlier this afternoon Bellicum released financial results for the fourth quarter and full year ended December 30, Onest 2019.
If you have not received this release work you would like to be added to the distribution list you can do so on the Investor Relations page of the company's website.
As a reminder, today's conference call will include forward looking statements made under the private Securities Litigation Reform Act of 1995, including statements regarding our research and development plans clinical trials plans regarding regulatory filings review and approval of our product candidates commercialization extra.
Occasions, and our financial outlook.
These forward looking statements involve a number of risks and uncertainties and reflect our opinions only as of the date of this call.
We undertake no obligation to revise or publicly released the results of any revision to these forward looking statements in light of new information or future events.
Actual results may differ from those indicated by these forward looking statements due to numerous factors, including those discussed in the risk factor section of our form 10-K for the year ended December 30, Onest 2019 filed with the Securities and Exchange Commission.
And now I will turn the call over to Rick Fair Pelicans, President and CEO.
Thanks, Stephen Good afternoon, everyone and thanks for joining us today.
On our call I'll provide an update on our go car platform and programs and two recently announced a corporate transactions.
As a reminder, our go car platform is differentiated in two distinct ways.
First we've engineered go car with the goal to deliver more potent and durable efficacy relative to current generation car T.
This was accomplished primarily through our co activation domain Mighty 88, CD 44 M.C.
M.C. signaling is believed to boost effector cell proliferation and survival to enhance functional persistence by resisting exhaustion and the suppressive tumor micro environment and to stimulate the cancer patients own immune system.
Second we engineered go car for higher performance, providing enhanced control with our switch technology.
Other cars therapies behave unpredictably due to their autonomous activity, but go car anti tumor effects are controlled by the scheduled administration of remedial said.
Go car activity can be modulated by adjusting the interval between room. It you said doses.
In our dual switch product candidates, we further improve control ability by incorporating our cats beside safety switch, which is designed to rapidly eliminate cells when triggered to manage acute toxicities if they occur.
As a next generation car platform. We believe go car may address many of the shortcomings of current cell therapies.
We have demonstrated some of these potential benefits in our preclinical work and are now observing supportive evidence of these effects in the clinic.
We are currently pursuing to strategic pass for our go car platform.
Our first strategy is to target solid tumors, where current generation car T therapy is of offered little benefit and where M.C. signaling may enhance activity.
Our solid tumor go car T programs include BP XXL, one targeting P.S., CA and BPX six centsthree targeting cartoon.
Our second strategy is to pursue and allogeneic off the shelf cell therapy.
We believe that our go car platform has the potential to drive proliferation and persistence and to stimulate the host immune response, both of which will be critical to delivering effective off the shelf cell therapies.
We seek to demonstrate the best in class potential of our approach with our newest program, which is a go car NK targeting bcm may.
Now, let me provide an update on each of our programs.
Our first go car T product candidate BP XXL, one targets P.S. CA in pancreatic cancer patients.
At the ASCO annual meeting in June of last year, we presented clinical data from an ongoing phase one two clinical trial.
The single dose schedule of remedies said during dose escalation was intended to evaluate safety and was not optimized for efficacy.
However of the 13 patients evaluable for efficacy eight patients or 62% achieved stable disease, including three with tumor shrinkage between 10 and 24%.
These were late line pancreatic cancer patients receiving a sub optimal schedule of treatment. So these results are quite encouraging.
In January this year, we presented new translational data from the highest dose cohort five be that further support the potential of BPX Excel, one and the go car platform in solid tumors.
We are encouraged by many of the reported findings, including tumor infiltration go car T mediated immunomodulation persistence of cells for up to nine months and changes in gene expression in the tumor micro environment consistent with a productive car T cell immune response.
We're now enrolling cohorts side C to evaluate repeat remedies that dosing.
Our preclinical experience suggests that regular remedies, suggesting can reactivate and expand go car T cells over time without creating piece Alexander exhaustion maximizing the clinical efficacy potential.
We are eager to complete this cohort is this is the first time to go car system is being used in patients as intended.
Enrollment of second line pancreatic cancer patients in this cohort is now proceeding and is in line with our expectations. We're planning to present interim clinical results in a medical meeting by the end of the year.
Based on the data we have seen so far we remain optimistic about XXL, one as a product candidate and as a proof of concept for our go car platform.
Now, let me shift to BPX accessory.
This program is valid comes first dual switch product candidate, which has been designed to target solid tumors that express or too.
We selected her to as a target for BPX six centsthree because it has a validated target for cancer therapy with clinical activity and reasonable safety observed an academic car T trials.
We believed that our dual switch technology may or may be uniquely suited to improve upon these earlier efforts by driving greater efficacy three M.C. signaling and providing an extra layer of safety via our switch platform.
After we submitted an eye in the application for BPX six three the FDA requested additional nonclinical data to further characterized the product candidate.
The additional nonclinical experiments to generate the data are underway, we expect to provide an update on our progress with BPX accessory in the third quarter of this year.
Turning to our Bcl May go car NK program.
We're excited about the potential for our first off the shelf go car NK candidate.
Car NK cells represent an exciting next wave in the evolution of cell therapy.
In addition, the car mediated antigen recognition NK cells also possess an eight cytotoxic activity and play an important role in anti tumor immune responses.
Furthermore, allogeneic NK cells have a low propensity for causing graft versus host disease falling adoptive transfer and therefore, maybe particularly useful for off the shelf cell therapy.
While previous experiments with NK cell therapies have been safe only modest efficacy has been observed largely due to limited nvvault NK cell expansion and persistence.
We presented preclinical data at the city meeting in November of last year.
In preclinical studies are go car platform Synergized with aisle 15 to enhance NK cell proliferation survival and cytotoxic function.
Co expression of our M.C. kohut activation domain I, all 15, and the tumor specific car resulted in enhanced in vivo efficacy in multiple nonclinical tumor models.
Based on these proof of concept studies, we believe the go-cart NK cells have the potential to serve as a best in class off the shelf cell therapy, and we selected Bcm a is the target for our initial program.
Bcm is already well validated from art autologous car T studies in multiple myeloma with high response rates observed.
Given our preclinical experience we believe the go car and K may improve the durability of response.
Also as an off the shelf Sarah therapy, we anticipate the advantages that may bring including faster and more certain time to treatment greater scalability and convenience and lower cost to manufacture.
We're developing proprietary processes to prepare to deliver these benefits and large scale go car NK cell manufacturing. We recently initiated formal preclinical development activities for RBC. You May go car NK program, we expect to present additional preclinical data from this program by the end of the year.
That concludes the summary of our development programs, let me now turn to our corporate updates.
First regarding manufacturing operations earlier this year, we announced an asset person purchase agreement with MD Anderson to acquire Houston manufacturing facility for $15 million.
Given our current strategic focus on our early stage go car programs. The facility was six substantially under utilized with a significant fixed cost base.
As part of the transaction, we will also enter into a preferred supply agreement with MD Anderson to manufacture abella comes current and future product candidates.
This transaction assures us access to cell therapy product supply, while reducing our operating costs.
Transaction is expected to close by the end of the first quarter.
In a separate an unrelated transaction in late 2019, we announced that MD Anderson exercised its option to license Bellicum cast Besides safety switch technology for a 5 million dollar upfront payment plus future milestone payments and royalties.
The license agreement with Bellicum, specifically covers use of the cast beside safety switch in MD Anderson's Cdnineteen car NK cell program that was recently sub licensed to Takeda pharmaceuticals.
We believe the disagreement demonstrates interest in our molecular switch technology and further validates our platform.
With that I'd like to hand, the call over data back to review our financials.
Thank you Rick.
Welcome reported revenue of 5.1 million for the fourth quarter 2019, and $7.1 million for the for year ended December 31 2019.
Q4, 2019 results included a $5 million license fee from MD Anderson for the use of the cast beside safety switch.
R&D expenses were $13.3 million and $64.5 million for the fourth quarter and for your 2019, respectively compared to 19.9 million and 71.6 $9 during the comparable periods in 2018.
The reduction in expenses in the fourth quarter and full year 2019, compared their respective periods. In 2018 were primarily due to the reduced expenses related to reversal.
General R&D.
And employee salary related charges from the reduction enforce that was implemented during the second half a 20 that Tim.
These reduced expenses were partially offset by the impairment of intangible assets previously exported from the middle to any supply agreement.
Increased expenses related to our go car T program and employee severance costs arising from the reduction in force.
General and administrative expenses were 5.7 million and $30.0 million for the fourth quarter and full year 2019, respectively, compared to 7.0 million and 25.0 million during the comparable periods in 2018.
The reduction in expenses in the fourth quarter of 29 team relative to the comparable period and 2018 was primarily due to a decrease in personnel costs and share based compensation from the reduction enforce that was implemented during the second half of 2018.
The increase in Gionee expenses for full year 2019, compared to the prior year was primarily due to an increase in personnel costs and brick and commercialization activities. During the first half between 19, partially offset by a reduction in reversal related commercialization activities as was the effects of the reduction enforce the reduced.
Play salary related charge.
Okay.
Bellicum reported a net loss of $29.0 million for the fourth quarter between 19 and 125 point.
Hundred $12.5 million for the full year 2019.
Paired to a net loss of 27.2 million 98.0 million for the comparable period in 2018.
The results included noncash expense, a 14.3 million a 19.2 million related to the change in fair value.
Fair value of warrant liability in the fourth quarter and full year 2019, respectively.
Turning to the balance sheet as of December 30, Onest way 19, cash and cash equivalents unrestricted cash totaled $93.8 million into fourth quarter, we had a cash loss from operations of approximately $12.7 million, which included the MD Anderson license fee and was a decrease from prior.
Quarters, given the steps we've taken the streamlined organization.
Based on current operating plans and assuming the MD Anderson facility sale transaction closes as scheduled bellicum expects cash utilization of $55 million to $65 million and 2020 and that current cash resources will be sufficient to meet operating requirements and to the second half a 2021.
And now I'll hand, the call back over to Rick.
Thanks, a lot about.
Looking back at 2019, which is a year of transition and strategic rift refocus for us I'm pleased by our accomplishments we made clinical progress presented data on BPX ex the one prepared and submitted an eye in the application for VX six Evthree and initiated our first go car NK program.
From a corporate perspective, we extended our runway through a significant financing sale of our manufacturing facility reduction in our operating cost base and license of our cast besides safety switch, which enables us to fund our strategic priorities into the second half was 2021.
This year I anticipate additional progress in our programs in the third quarter, we plan to update you on the status of the eye in the application for VX six evthree.
And by the end of 2020, we're planning to present clinical update on BPX six so one with focus on repeat remedies to dosing and preclinical data for RBC I May go car NK program.
Im excited about our future the potential of our go-cart pipeline and look forward to updating you on her efforts.
Now open the call to questions.
Later.
Thank you at this time will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad a confirmation tono indicate your line is into question Q you May Prestart too if you would like to remove your question from the Q for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
One moment, please what we pull for questions.
Your first question comes from line of.
Byron men with Jefferies. Please proceed with your question.
Yeah, Hey, guys. Thanks for taking my questions.
Rick on Sixtyl one.
When you give us a data from the five see cohort how many patients should we expect the second half a year.
Sure. So the design is three plus three design and this cohort it's designed to treat three patients clearer.
BLT window, and then treat three additional patients with the second DLP when does the six total patients I think the number of patients. The report on will depend on.
Enrollment and follow up time, and we'll certainly also depend on whether or not any patients experience. The LTE. So that'll apps the neighborhood of the number of patients.
And when I compare.
Your present, the data and we compare to the IP data that you presented.
I think you saw.
Three patients with stable disease in that coal or and you saw pretty decent thank cell expansion that persist.
I guess.
You know from a buyout biology standpoint.
What do you think we need to get to from an expansion of persistent fat point, where.
You can start to see P. ours in this patient population.
Yes, that's a tough question to answer Baron.
You know, we don't have a lot of experience in the cell therapy space. Unfortunately of car T cells driving responses in solid tumors. So it's a little hard to know.
Hey, how to how to correlate that with expansion, which is where typically measuring and the periphery I think what I'd say is that we believe that reactivation of the cells.
Our system is important both to drive.
Proliferation, and persistence of those cells and to drive cytokine production that will engage the host immune system and our response and we're optimistic based on our preclinical experience that that will lead to greater tumor control whether that will achieve partial responses in pancreatic cancer patients or not we'll just have to see.
And then what was the rationale for going into pursuing this BC M&A and K opportunity.
So the NK cell as I discussed on on the call I'd be NK cell is for US an exciting platform for an off the shelf therapy. It doesn't cause gvhd. It has its own ability to kill tumor.
The limitations with NK cells, historically have been driven a lot by an inability to proliferate and persist.
So is it off the shelf therapeutic that's challenging we have a system. That's designed to do just that so that's really the rationale for the NK cell part portion of that.
We selected VCM eight because we think we have an ability differentiate and an area where there will be clearly an important role for cell therapy based on the autologous Carty experience and based on our preclinical findings with the go car NK platform. We think we have the ability to be.
Best in class off the shelf solution targeting Bcm may I would also say that it's useful when you're evaluating newtek technology like ours.
To have some level of target confidence and clearly bcm, a is as a validated target for cell therapy.
Okay.
Got it thanks for taking my question.
Thanks Barry.
Your next question comes from line of Nicolas Abbott with Wells Fargo. Please proceed with your question.
No.
Nick on for Jim.
Thanks, taking my questions.
Maybe just starting off on six times three so could you elaborate on what Nonclinical studies being undertaken what level of confidence you have this diesel in transcatheter concerns.
Yes, so based on our follow up interactions with FDA to understand the nature of the information being requested we're conducting in vitro experiments to evaluate the level of interaction of BPX sixthree cells with healthy tissues that express lower levels of her too.
Which we believe.
Answer their questions, specifically I'd say, our confidence level is relatively high obviously, we need to complete those experiments and submit them and get the response, but.
I would say our confidence level is high based on the question being asked and what we've seen today will provide an update as we indicated Q3.
And I mean, roughly how long do these experiments taken I guess, we were assuming that your complete the experiment submit to the agency. They review so by the time, we get through Q3, you getting through that kind of of the process.
Well I think it depends on the outcomes of the experiment, but if all goes well certainly that's right.
If we if our initial experiments dot yield the results that we were looking for and we have to it design and conduct additional ones that could vary. So I don't think I can really speculate too much on that other than to say that we think we're doing the right things to answer their questions. I think we have optimism that they will answer their questions and we can update you. If you want the time.
Okay and then.
Okay and can you talk about.
Thanks.
Going to use I mean, there's some data.
For by parents topic bind.
Well the human binders.
What's your strategy to try and get a you know what you hope is the best in class Binder.
We probably won't speculate too much on that Binder selection is certainly part of our finalization of the construct designs that were currently working on our anticipation is that we will work through that and half what we need for final candidate selection for that program.
In about a years' time, or maybe a little less.
So I don't think I speculate on that currently and we'll update you as we get a little closer and do more experimentation on that.
And should we expect a 90 in 21 for this program.
I think our.
Obviously, we'll dependent depend on our progress, but I think our current estimate is roughly two years tie Andy from where we sit today. So that that gets you into potentially early 22.
I would say or late 21 is potentially impossible, but but you know that could also changed a lot and two years' time based on our work.
And then just under one for me in terms of ill jump back into queue.
On use of cash.
Yes, you've got one clinical program, you're competing with perhaps a handful of patients.
Enrolled so what is driving the cash utilization of 50 or 60, Holly this year is ever an assumption that you.
Moves six or one into the clinic.
So yes.
I'll, let out of back address that question.
Sure.
So.
I do we talked about in the past snack we've taken on number of measures to reduce our costs.
And then ultimately.
Cell therapy.
And as is.
As it has a fair amount of expense associated with it and face a fair amount of fixed costs expense associated with it. So we've tried to reduce that as much as possible. So.
And so I think from what we've assumed for this year is primarily around died in terms of what's in the clinic is around it's around bps fix on one driving that expect.
Okay. Thank you.
Your next question comes from line of Steve, Yes, with Raymond James. Please proceed with your question.
Good afternoon, a this is the Neil on for Steve I think if we're thinking the question.
The question with respect to.
So one.
In your ESCO Gee I pull through suggested that.
Yes, it's a one of extra copy number drop off longer Medusa infusion, possibly due to redistribution of activated T cells from the blood stream.
Potentially bias towards Houston.
Do you expect this effect to be exacerbated in go forward five see obvious repeat your me do sit those are the expected BCN are bound to be just as quick as enough I'd be cohort.
Maybe I'll turn that question over to air and Foster head of research is on the call.
Yes. Thanks, Thanks for the question as you've noted we have.
Consistently seen a decrease in vector copy number immediately following or Mitch said and as you.
Adjusted as our hypothesis as well as this is due to margin nation.
Oh, the T cell through I am see related activation.
Probably our expectation for Q4 for cohort I see is that we would see similar types of that activity.
Respective vector copy number in the peripheral blood.
This is primarily due to the fact that in our preclinical studies that we've observed.
Consistent activation over a number of periods of Rimage rimages it exposure.
And what that effect will be ultimately on CCAR expansion persistence or antitumor activity, so yet to be determined.
Alright, great. Thank you for that and another.
Question.
The cronto wires condemning going on do.
Have you seen any impact on your clinical trial.
Imagine some patients may be reluctant to come in for.
Reducing those thing a once a week and.
Do you have any contingency plans in case I patients feel just keeping those multiple dosing supposing appointments.
Yes. So great question, obviously, we're in early days of the pandemic here in the U.S., where our clinical trials are being conducted I would say as of now our sites continue to see their patients who continue to screen new ones.
So we have.
They have experience really no effect of the pandemic currently.
That said I would characterize this as a very highly highly fluid and rapidly evolving case.
We are in regular contract contact with our sites and will take whatever actions are necessary to continue to try and treat the patients that are on study into acquire new ones.
I think there their message dust has been year, we're dealing with relapsed and refractory pancreatic cancer patients who have an acute need for treatment.
So I think it's likely that would be.
Yeah, that'd be the type of patient would continue to seek care and get care, even in a in a more profoundly affected health care system.
No I don't watch for taken our question.
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Question comes from line of Huang They Lee with Ladenburg. Please proceed with your question.
Alright, Thanks for taking my question most quickly ask so.
Sure.
Good morning patient right now you said, a three to six patient, but oh the couldn't you know.
Any include a euro to you in parallel cross multiple centers or the one by one.
The your cellphone cut out there at the beginning of that question, but if I understand the question correctly. It's.
More clarity on the enrollment of the current cohort five see in the scheme in there.
Yeah. So how many spenders are your own in patients that do they Andrew pacing in parallel or either one by one of sequentially.
Got it so we have us.
Sequential in Rome, and the two different three cohorts assets. So we can enroll three in parallel.
Then we have to wait for the LTE window, and then we can roll another three in parallel and wait for the LT window. We're currently open in four sites.
Okay and.
And the 70 window into today.
I'm sorry, when he can you repeat that.
Sorry, the safety window is 28 days.
Yes, the safety window is from the second.
Or third.
I am.
The second or third dose of Rimages impose cells. We then have to wait a month.
So in practice, you're talking to you in practice, you're talking about roughly a 45 day.
Period to post the last patient treated in the three patient cohort.
Got it okay, that's very helpful.
And then for those three when you expect you go right to update you understood a corridor.
Do you expect already had communicate with da ticketed their feedback on the new data before approval.
Well you provide.
An advantageous or where you will provide an update.
At the FDA feedback.
I think we're committing to provide an update regardless if our initial set of experiments go well and answer the question and we submit them and get positive feedback from the FDA that'll be the communication I think in in that sort of downside scenario. Our initial round of in vitro experiments don't answer. The question are we needed to conduct some additional experiments.
Which case will be will be describing that so I think there's a range of outcomes I think what we're committing to hear today as you know we're not going to.
Have an indefinite period to the next update but we'll be clear that you know on our mid year calls in the third quarter, we'll update.
Got it okay, well that's of course is a financial question.
So.
If I look at the show the number.
Fourth quarter.
Along closer to farm insurers.
Got it because the worst me and that's one of the reverse split it down in February. These here. So I have a man tend to widen the Sharon number for the fourth quarter.
Yes.
Looks like already how did the reimbursed defect.
Further accounting guidance you.
If you are complete reverse fled before you file your 10-K, you look you presented retroactively.
Okay got it alright, thanks for taking my questions.
Your next question as a follow up from Nicholas with Wells Fargo. Please proceed with your question.
Hi, Thanks thinking Oh.
So just going back to the six so on post.
Yeah.
When I'm looking at.
Thank you.
The tuna PSC expression in finger sticks on before and after treatment.
I should probably be side with the woman.
Number of in trading costs ALS.
And yet on treatment.
He signal, Okay is highly diminish compared to baseline so I guess I'd like to means that hey, since heterogeneity in sampling.
The that the top level is going down we'll see that you're killing documents. So was there are other staining you're able to do on these samples to look at tumor in trying to address this issue whether it's down regulation.
Clearance and natural human cells.
I'll turn that question over to Aaron Aaron do my comment.
Yes sure.
So.
In.
Let's figure that you're talking about we used in seat you hybridization for an already probes repeat CA and while we think that that's a good way to measure PSC expression of course looking at the protein level is probably more appropriate.
We're currently developing assays to.
Assess.
Protein levels through immunohistochemistry networks ongoing so I would agree with your comments about.
The question about protein expression heterogeneity levels, and it's certainly something that we're very interested in exploring to understand whether we've hit the target or not.
Thank you and then just oh and going back to.
Cash utilization in terms of.
Repo. So now obviously there is no no comment in your prepared statements but.
So is this lack of interest on the asset lack of agreement on financial structure and as you cashews contemplate.
Any.
Hey.
Any funds coming in from an asset sale on so.
Yes, I think.
We have identified the universe of people that have interest in reversal we haven't.
Come to terms that are acceptable for the asset and we may not.
Our current cash guidelines assumes that we retain.
The rights to the asset and some amount of ongoing costs related to monitoring the clinical trials that have concluded.
But.
If we have an update on reversal in the future will certainly provided.
And to be clear, we're we're not assuming any any.
A transaction strategic transaction occurs with that so that would be incremental.
Benefit to our cash utilization.
Okay, great. Okay. Thank you very much.
Ladies and gentlemen, we have reached the end of the question answer session and I would like to turn the call back to Mr., Rick Fair for closing remarks.
Thanks, everyone for participating today.
Busy an intense day.
As always I'd like to thank our passionate team of deletions, our collaborators and investigators and most importantly, the patients and families who participate in our clinical trials. They are the ones who inspire our effort everyday if you have to additional questions feel please feel free to contact us and thanks for joining us this afternoon.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
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