Q2 2020 Precigen Inc Earnings Call
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Welcome [laughter] corridor, and purchased 2020, <unk> financial results and there's no.
This conference call.
Participants will be in listen only mode should you need assistance, placing know what comes from special.
After today's presentation, there will be an opportunity to ask questions.
So.
I would.
I would now like to turn the conference.
Over the.
Even with some.
Go ahead.
Thank you operator.
I'm pleased to be joined today by Dr., Howard So I'm, sorry, President and CEO question as well as Tom sandals, and how to financial strategy.
Following our prepared remarks, well open the call to QNX.
Please turn to the next slide for forward looking statements.
During today's call will make various work looking statements that she was are cautioned that forward looking statements are based on current expectations.
And are subject to risks and uncertainties that could cause actual results or outcomes to differ materially less indicated by are forward looking statements.
Please read the Safe Harbor statement contained in this presentation.
As well as the risk factors contained in presages, most recent SEC filings for a more complete discussion of these risks and uncertainties.
No look to turn the call over that Dr. slots at Mary Ellen.
Thank you Steve.
I hope that this call is poised to all our listeners and their families safe unhealthy automation continues to work to cope with 19 pandemic.
Yes, it does the health and safety of all our employees, it's all the out most important.
R&D stuff has been back in July this full time and or getting tested on a regular basis.
Please or practicing appropriate safety measures, including social distancing rigorous disinfection protocols and he was a personal protective equipment, while in our facility.
Despite these challenging toward our team has addressed that well to be near normal.
Currently we remain on track to meet our previously stated clinical milestones I stayed auvi, though this year.
This is eating food for our team as we are able to execute on north mission to deliver a novel treatment options to patients with unmet medical need me.
Next slide.
I would like to begin by giving brief financial update highlighting our continued focus on fiscal and operational efficiency all with the aim of increasing shareholder value.
In the second quarter Twentytwenty presage in spending which include segment adjusted EBITDA plus corporate costs.
Was approximately 13 million versus 30 million into first quarter Twentytwenty.
This decrease was primarily attributable to suspending operations as NBP Tyson on streamlining our corporate functions to beat that number we're focused on the company.
We expect.
Then I M. B P to continued substantial did review as we evaluate strategic option for this platform.
Furthermore, our financial performance both.
So overall genetic.
Perfect and make sampler improved as the result of the efficiency measures. We have implemented we both entity will contribute to cash through Q2.
These measures and other efforts have positioned us to operate comfortably into the lake Twentytwenty, one without the need for additional cash.
Tom will provide additional detail later in the call.
Next slide please.
Turning now to our ultra car T platform.
When we began this journey yet presaging.
Our recent wants to develop and non viral rapid autologous T cell therapy that can be scaled up in a cost effective manner that is accessible to any cancer patient.
He identified three major technical hurdles that we believe we're essentially to overcome in order for the non viral sleeping beauty platform to cross the threshold of being commercially viable.
The first challenge was to be able to generate homogeneous so product.
That's kind of expanding legal and though for Goldman P. ex vivo expansion.
Yes.
Well im always being the non viral system to simultaneously expressed treat.
An antigen specific call.
Inbound on 16, and the kill sweet using or old trucks to platform.
No ensuring production of the homogeneous one for car T product, which we believe is an essential characteristic of avoidable so therapy.
Middle Greenbaum 15 maintain younger well truck car T phenotype.
Superior Invivo expansion and persistent.
Allows for the elimination of ex vivo expansion why was that kills which improved the safety profile.
I want to emphasize that the intellectual property around the Ultravector platform I'm improvements to the non viral system like exclusively with the precedent.
The second challenge was to achieve feasibility of manufacturing or to a car T.
Using overnight gene transfer medical center.
Yeah, hopefully Steve by developing an overnight de centralized manufacturing process without the need for car T cell expansion outside the body.
Where we walked in like the process to significantly improve the efficiency of non viral gene transfer.
So for T cell viability and its quality control testing to address dosing and regulatory requirements for overnight money Secretary.
As a result of these innovation.
Progress the Ultrabook car T platform successful laying the clearance.
Into the clinic to personally club car T therapy.
Next slide.
Then Terry challenge was to develop it commercially viable process that can be scaled up to treat a large patient population across the globe.
Good day non viral gene delivery approach is.
Rely on a commercially available electroporation device it.
We tried to limitation due to the investor relationship between them cool pool.
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These results.
Labor intensive process, and then materials handling of samples that increased contamination risk on pose challenges for the scale up an eventual commercialization.
I'd be advance toward initiating the expansion phases of or Ultrabook car T clause to investigate the efficacy in larger patient population and scalability of the process is up that all most important.
I should emphasize that our ultimate goal is to develop and commercialize treatment based on the ultra low cost T. platform.
Next slide please.
In order to address this challenge we have developed an exclusive electroporation device ultra operator design to scale up the manufacturing or ultra low cost T program at multiple medical centers.
This is the terms on our path to would developing a commercially valuable ultrabook car T manufacturing platform.
The ultra operator is a high throughput system, we get cost them hardware and software solution capable of handling the electroporation I'll billions of T cells in a matter of minutes I compare to multiple hours of processing currently required.
Furthermore, the semi close to seven minimizing handling requirements.
Nifty currently reduces contamination risk and streamline the overnight manufacturing process.
Yep Yep cleared the use of cultural prader as in manufacturing device for all clinical trial.
And we have initiated the manufacturing of cgmp compliant system.
We are currently in the process of technology transfer to our clinical sites and expects to implement the system for the expansion phases of P. and 3005, P.O.G. entry Thomson sick and the future old truck car T clinical trial.
Our progress so far with regulatory milestones I'm Tech transfers underway is a testament to our teams forward looking thinking.
Anticipating challenges and designing solutions in an aggressive timeline.
Well take a step by.
And give you some perspective <unk>.
We believe that deep inhalation represents cause it to advance in the field of personalized medicine.
Allowing us to bring the drug manufacturing process.
As close as possible to patients and it commercially viable and expedient way.
We will be updating you on additional milestone associated with the ultra operator in the next several months.
Next slide please.
Turning to pure GM 3005, our phase one clinical trial in ovarian cancer targeting the onset portion of my 16 on cats or something.
In June we presented preclinical data, though PRC and 3005, Okay of course, Ti, but if youre virtual annual meeting.
The preclinical data demonstrated that the single administration appeal. If you have 3005 was able to month, it's doable I'm, probably tumor response, resulting in elimination of where we're going to move them for a second time after two movies challenge more than three months later.
[laughter] study design to similarly to move really.
Highlights the persistence and functional capability appealing to you in 3005 to reactivate after a long period without antigen stimulation.
In the clinic, we already enrolling patients in the dose level three of the I.P. arm of the price.
I'm remain on track for an initial data readout from these on this year.
Our confidence in our ability to successfully manufacturer Ultrapar few remains high.
We continue to hundreds for Sun manufacturing success.
Escalating to higher doses.
We are very excited with the progress of PR Gen 3005, Ultra car T into clinic so far.
Next slide please.
Now moving to PRC and 3006, our first in class candidates for relapsed or refractory AML.
These phase one one be trial continues to enroll patients carestream, both the lymphodepletion a non lymphodepletion arm.
We have completed dosing the third patients in a dose levels to up a non lymphodepletion on.
Today, we continue to have hundreds person manufacturing success.
We remain on track for them the initial data read out this year.
We are very excited with the progress of PRT and 3006 Ultra car T. In the clinic so far.
Next slide.
Turning superyacht due in 2009.
In April we announced that the FDA cleared an investigational new drug application to initiate a phase one two trials for PR Gen 2009.
Our off the shelf investigational I didn't know verse immunotherapy designed to activate the immune system to recognize on target HPV positive solid tumor.
I would like to highlight.
That's the design consideration.
Frenchie PR again, 2009 from competing vaccine and PCR P., so approaches for the treatment of HPV associated cancers.
Beyond you in 2009 incorporate multi epitope design, including novel antigens episodes.
Target boat <unk>, HPV 16, and HPV 18 sometime.
Oh the approach is differentiated from other competitors are HPV vaccine and TCR p. so approaches.
For example.
TCR T cells only target a single epitope, we didn't he speaks or east seven region of HBV.
No restricted in their applicability to its small patient population due to actually restriction.
Yeah again 2009 based on all the Gorilla I didn't know vector is an off the shelf therapy that can be administered repeatedly unlike other wild based vaccine.
Actually they polyclonal H.B.B. specific T cells in vivo.
This is in contra to TCR T cells, which require Elon tea and complex manufacturing process ex vivo play of confusion and only target a single epitope HBV.
You aren't in 2009 is under development through a cooperative research and development agreement or Credo within National Cancer Institute, an M.C. I currently recruiting patients for the open label trial.
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We believe PR June 2009 has the potential to be an attractive treatment option for other HPV associated malignancies, and we continue to evaluate specific opportunities, including X P associated that said we called cancer.
Next slide please.
Hey, just little Onenine is the first in class disease, modifying I'm sure you're not specific investigational immunotherapy for the prevention delay or reversal of type one diabetes <unk> disease with no approved disease modifying treatment.
He's ever one nine is being evaluated as a monotherapy or in combination with anti CD three antibody kept leaves a map in a phase one beat to a study.
In early spring, we implemented evolving through Cobas 19, released as Paul for the last remaining get study cohort.
The phase two a study.
Which is the combination or in patients 12 to 17 years of eight.
The temporary pause husband lifted and Detroit is recruiting patients again.
Today.
Presage, an actor bar, you announced positive topline results from the phase one be portion of the ongoing phase one be two ways study.
Results from the phase one be portion, which is the AG 019 mono therapy on indicated that the primary endpoints for this study was met with no serious or any severe treatment emergent adverse event.
One of the winner preliminary analysis six months after treatment initiation showed an encouraging trend in insulin C peptide level, a common biomarker to measure pancreatic beta cell function.
Furthermore, based on preliminary analysis, ADU 019, mono therapy shows an increase in the frequency of eyelids specific T. Rex a potential mechanistic indicate there therapeutic activity.
We are very encouraged by these preliminary data I look forward to reporting additional data in the near future.
Next slide please.
Another exciting I said in our portfolio is I didn't make sense 4001.
No one gene therapy for heart failure patients, which is being developed by our majority owned precedent Triple gene subsidiary.
Last week, we announced six month follow up data from the ongoing phase one study.
We are encouraged that I Nx, and 4001 was well tolerated and their studies successfully met the primary safety and feasibility and point with no product related adverse events reported.
Moreover, preliminary data shows and overall improvement in patient reported outcome at six months post treatment.
We look forward to sharing the final. This study resolved at the 12 month follow up in trouble.
The other evaluating a strategic options to partner and financed the future development of this platform.
Finally for an update on P.O.G. and 5001 interest remains tight you know multifunctional therapeutic candidates for solid tumors.
We look forward to updating you in the near future.
With that I will now turn the call over to Tom Samuelson to provide a financial update Tom.
Thank you Alan and good afternoon to our stakeholders on the call.
Hey, we report progress in reducing our capital requirements and maximizing our cash runway.
Q2.
In the required $13.1 million, a reduction of 18.8 million or 59% versus Q2, 19, and a reduction of 16.6 million or 56% versus our previous quarter Q1.
Unallocated corporate costs for 4.1 million or 36% lower than Q2 19 due in large part to a 25% reduction in corporate employees and a decrease in professional fees as we streamlined organization.
Further savings were realized by our decision to suspend operations at MDC Titan and improved financial performance at operating subsidiaries Trans Ova genetics and President exemplar.
At the beginning of this year, we identified a number of initiatives that trend aimed at increasing profitability predominantly through growing out or high margin service business and reducing the various ancillary offerings and overhead costs.
We're happy to report that despite ongoing economic challenges and the dairy and beef markets. Each one gross margins at trans Ova expanded to $14.9 million, a four point sixmillion or 45% increase over 29 channel and segment EBITDA.
We're also encouraged by continued growth in both revenue and segment EBITDA Presage. An example are highlighting a growing market for predictive models of human diseases.
For example, our each one revenue for $1.2 million to 4.3 million and segment EBITDA expanded $2.7 million to 0.9 million, reflecting growth despite reductions in operating gosh.
Both Trans Ova. An example, our contributed cash suppress agenda and we anticipate that folks will continue to do so.
The president global economic conditions. This acetate careful monitor and we will remain vigilant to developments that may occur in the industries in which we operate.
While our no loss of $43.4 million or 26 cents per basic share exceeded that of Q2 nine scan. The majority of this loss $31.7 million was non cash.
Recorded 22 million in noncash impairment charges in conjunction with the suspension of NBP tightens operations.
Third we had cash cash equivalents and short term investments of approximately $133 million.
Based on our present expectations, we anticipate these funds would be sufficient to fulfill our capital requirements into late 2021.
We encourage you to read our 10-Q, which provides more information about all of the matters that I've discussed today I.
I would now like to turn the call back over it out.
Thank you Tom.
I'm extremely tankful talk team, which continues to advance our portfolio during these unprecedented times.
The second half we have started to report a number of data sets and they achieved milestones we set forth in early 2020.
A press again, we realized that only by efficiently translating research into therapies can we deliver benefits to patients with unmet medical needs.
I mean time create value for shareholders.
For this reason, you're sending ambitious drug development timelines for ourselves as evidenced by our progress since the start up this year.
We remain confident in our innovative I'm focused portfolio I look forward to providing you with the updates in the coming weeks and months.
With that we will now open the lines for questions. Operator, please begin.
Well now begin the question and answer session to ask question Human Press Star then one on your Touchtone phone.
If you're using a speakerphone please pick up your handset before pressing the key to withdraw your question. Please press Star then too please limit your.
Limit to two questions and one follow up at this time, a little pause momentarily to assemble a roster.
Oh first question is some Jason Butler from J M. P Securities go ahead.
Hi, great its Roy in for Jason. Thanks for taking her question I guess, the first couple on the ultra greater or maybe maybe I missed it but did you say what the toll manufacturing time you did you can achieve what this this new device how much further anything it can be improved and what process improvements are you considering to get to that time.
Hi, Jason and thank you for the question very good question I wouldn't be started a actually and advancing the ultra upgrade their car and that in our discussions even with the Sta from the first the moment was not only achieving all the correct.
Very adept was necessary, but what does it take for these process of overnight to be it's scalable globally and reduce yeah really handling and I.
Yeah, basically technology to the point that you can go from our.
All right handling Peyton Tonkel that is required for transaction on what they call it a little Kuwaiti doors.
You have seen in debt like for instance in order to a process.
Hundreds of millions it takes many many many hours, which introduces a lot of issues with contamination also mistake, we decide that oh in conjunction I'm discussions with the F.D.A. to other people that Lansing the platform to come up.
Lead and device that can be seemed to me.
On the commercially viable production of the old truck Hot tea and as a result was then ultra upgrader as you see in Dan a flight and by the way obviously you.
Slides, all showing in a cartoon and to just get the point that cross but call lastly, the old hopefully there's always being implemented.
Our clinical sites I'm, especially as we are moving rapidly to without an expansion phases, which quite exciting for us. It's yeah being implemented on tech transfer is done we aren't going on we have reduced the number of hours and handling and processing all Hum goes up.
You bet, which otherwise would have been handled and lot of all to go from.
Two to three hours to under 12 Amendment process. This is how important this manufacturing device is on it reduces debt.
Basically the processing am humbling, which can lead to contamination and others failures of money faster than we anticipated.
And when we started this journey and I I'm really proud of the team that day. We have brought four would mean exact timeline that we had said I'm you had discussed with this yet and now we also have the FDA clearance without clinical trials to implement.
We agree then a question on pure Gen 3005 years, you're up a third dose level. What's the initial data read out going to include and could not included more than the first three doses.
I think yep. So what we are currently doing obviously the safety and it will have the kinetic Oh, we have discussed.
And Oh, we will make a decision I really enrolling although patient and and move to would perhaps expansions.
So how we will communicate that oh.
Okay. Thank you show.
Again to ask the question. Please press Star then one.
Okay. At this time, we have no question.
Well turn it back.
True Hello, Hi, sorry for closing remarks.
Thank you again for joining us on today's call. We are very excited with ought to progress I look forward to providing further updates in didn't mean fixture.
Thank you.
The conference has now concluded. Thank you for attending todays presentation you may now disconnect.
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