Q4 2021 Alaunos Therapeutics Inc Earnings Call

March 30, 2022

Ladies and gentlemen, thank you for standing by and welcome to the <unk> Therapeutics fourth quarter and full year 2021 financial results Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If you require operator assistance. During the program. Please press star Zero I would now like to turn the call over to your host Alex level.

So an investor relations you may begin.

Yeah.

Good morning, and welcome to <unk> fourth quarter and full year 2021 financial results conference call and webcast with me today are Kevin Boyle Senior <unk>, Chief Executive Officer, Phil Gallagher, Vice President of research and development and Mike One our vice President of Finance.

Earlier this morning, <unk> issued a press release announcing financial results for the three months and full year ended December 31 2021.

We encourage everyone to read today's press release as well as be allowed US annual report on Form 10-K for the year ended December 31, 2021, which was filed this morning with the SEC.

The company's press release and annual report will also be available on the allowed us website at <unk> Dot com.

In addition, this conference call is being webcast through the Investor Relations section of the company's website and will be archived there for future reference.

Please note that certain information discussed on today's call is covered under the safe Harbor provision.

The private Securities Litigation Reform Act of 1095.

Since our caution that this conference call contains time sensitive information that is accurate only as of the date of this slide broadcast March 32022.

Actual results could differ materially from those stated or implied by forward looking statements made on may today, due to risks and uncertainties associated with the Companys business.

Information on potential risks and uncertainties are set forth in our most recent public filings with the SEC at SEC Gov.

The company undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this webcast, except as may be required by applicable securities law.

With that said I would like to now turn the call over to Kevin.

Kevin.

Thank you, Alex and welcome everyone to the <unk> Therapeutics fourth quarter and full year 2021 earnings call.

It has been just over six months since I joined the company and in that time, we have made great strides advancing our novel TCR T program for the treatment of solid tumors.

Our vision for the year is all about execution and delivering clinical results.

I'm very proud of the team as we have made meaningful progress across both our clinical and preclinical pipeline.

All the while being good stewards of capital and significantly reducing spend.

I want to begin by reiterating the confidence that we have and weaponized, our TCR Ts to attack solid tumors.

Our team is motivated to treat patients and translate our expertise and unique scientific approach into clinical progress.

We appreciate the importance of generating clinical data to validate our TCR T platform and create shareholder value.

Our TCR T Library study is a basket trial targeting hotspot mutations across six solid tumor indications non small cell lung cancer colon rectum, endometrium, pancreas ovary and bile duct cancers.

This study is an open label dose escalation study being conducted at MD Anderson Cancer Center.

And we will enroll patients with one of these six cancers based on matching neo antigen HLA pairings that are available in our TCR T Library.

In December we further amended the studies IND application to include evaluation of an additional four tcr's.

Our library now has a total of 10 TCR.

<unk> five <unk> 53, and one egfr.

The addition to the library further increases the addressable market and pool of patients eligible for the trial.

Once enrolled patients will be infused at one of three dose levels with autologous T cells that have been engineered to express tcr's using our sleeping beauty transposon technology that are reactive against such mutated neo antigens.

We believe that this adaptive trial design is an optimal approach to advancing our TCR T Library.

As it should allow us to rapidly identify the recommended dose and then cost effectively advance multiple indications in the clinic.

We are one step closer towards value creation as we have consented. The first patient in our study and anticipating treating our first patient in the second quarter.

The manufacturing for this trial will be performed at our own state of the art Cgmp manufacturing facility, which we built in 2021.

This facility has been fully qualified and are staffed entirely by <unk> personnel for the manufacturer and release of clinical product.

The current anticipated capacity and the cgmp suite. This year allows for the manufacturer of approximately one product per month.

Before I turn the call over to drew Dennis <unk>, Our Vice President of research and development for an update on our preclinical programs.

I'd like to thank Rafael a buffer for his service to the company.

As per our 10-K filed earlier today Rafael will depart his role as Chief Medical Officer effective tomorrow.

His contributions over the last year to update the clinical trial design for our phase <unk> TCR T Library study and successfully amended IND application have helped.

To position <unk> for success.

<unk> remains a shareholder and firm supporter of the <unk> TCR T platform.

We wish him all the best on his future endeavors.

We have engaged a consultant with over 30 years of experience in clinical and drug development and we will also leverage the expertise of our board member Dr. Chris Bowden.

I would like to turn the call over now to drew to highlight our research and development efforts drew.

Drew.

Thank you Kevin.

Earlier this month, we announced an extension to our cooperative research and development agreement with the National Cancer Institute.

This creator will focus on evaluating our TCR T platform and a personalized TCR T setting targeting solid tumors.

In addition to our internal efforts and those at the NCI to advance our clinical programs. We are focused on expanding our research and development efforts.

One of these areas as IL 15, which is a cytokine that support survival of T cells and other immune cells.

We have developed the co expression of <unk> with a more potent and proprietary membrane bound IL 15.

This translates to increased survival of TCR T cells in the absence of other supporting signals, especially in team memory stem cells present in the manufactured product.

We believe this has the potential to augment TCR T cell therapy, and deepen clinical responses targeting hotspot mutations expressed in solid tumors.

We recently filed an international patent application around this technology covering these developments with TCR targeting hotspot mutations.

As we work to advance this program towards an IND filing in 2023, we plan to showcase new preclinical data at a major scientific conference later this year.

In addition, we also recently highlighted our human Neo antigen T cell receptor platform or Hunter, which is our TCR discovery engine.

We are focused on tumors expressing hotspot mutations and using tumor infiltrating helper and killer T cells.

We do in depth sequencing of thousands of individual T cell simultaneously to create a 10000 by 20000 matrix, which then can be reduced down to two dimensions using state of the art bioinformatics.

The identified Tcr's can be rapidly tested against neo antigens and added to the clinical library.

It is our goal to further explain expand the TCR library, this year and increase the addressable market for our cell therapy.

I would now like to turn the call over to Mike <unk>, Our VP of finance to review the financial results for the fourth quarter and full year Mike.

Thank you Sir let me review our financials for the three months ended December 31.

2021.

For the fourth quarter 2021.

Reported a net loss of approximately 11 8 million alright, five net loss per share.

Compared to a net loss of approximately $22 8 million or 11 net loss per share.

Fourth quarter 2020.

Research and development expenses were approximately $8 2 million for the.

First quarter 2021.

Compared to approximately $14 million.

Fourth quarter 2020, a decrease of 41%.

General and administrative expenses were approximately $2 1 million for the fourth quarter of 2021.

Compared to approximately eight 8 million for the same period in 2020, a decrease of 76%.

And now I will review the results for the full year ended December 31 2021.

For the full year ended December 31st we reported a net loss of approximately $78 8 million Alright, 37 net loss per share.

Compared to a net loss of approximately $80 million.

38, net loss per share for 2020.

Research and development expenses decreased by 6% to approximately $49 6 million in 2021 compared to approximately $52 7 million.

Prior year.

This was primarily attributable to lower program related costs.

Results of the winding down of our controlled IL 12 and car T programs.

For the full year 2021 general and administrative expenses were approximately 27 6 million compared to approximately $27 7 million for the.

Our full year 2020, a decrease of zero $1 million.

The decrease was primarily attributable to reduced professional services costs.

As of December 31, 2021.

China had approximately 76 1 million in cash and cash equivalents.

Cash burn for the full year 2021 was 61 $5 million.

We anticipate our cash runway is sufficient to fund operations into the second quarter of 2020.

That concludes our financial update I would like to hand, the call back over to Kevin for closing remarks.

Thank you Mike.

Our talented and dedicated Houston based team is working hard to transform our innovative scientific research into clinical progress.

Over the course of 2022, we remain focused on execution and we look forward to dosing the first patient in our phase one two TCR T Library trial in the second quarter of this year.

We are also working diligently to advance our membrane bound IL 15 program towards an IND filing in 2023 and expect to present at a major scientific conference later this year.

We believe that focusing on execution and delivering clinical data will result in shareholder value creation.

We will also continue to evaluate partnering opportunities for our noncore controlled IL 12 and car T assets.

With the strategic restructuring completed last year head count has been reduced from 112 people when I arrived in August to a team of approximately 40 today.

We continue to be good stewards of capital and expect operating cash flow for 2022 to be between 40% and $45 million.

A significant reduction year over year.

Recognizing the progress that has been made over the last six months and is a further vote of confidence James Huang has changed his role from executive chair to chairman of the board.

I have appreciated the guidance and accessibility of James and I look forward to our continued partnership in the year ahead.

The progress made would not be possible without many ni.

I am grateful for our team shareholders and partners for their continued support.

We will now open the call to questions.

Operator, Kevin.

Ladies and gentlemen, if you have a question or a comment at this time. Please press. The Star then the one key on your Touchtone telephone. If your question has been answered or you wish to move yourself from the queue. Please press machine.

Our first question comes from Chris Howerton with Jefferies.

Excellent. Thank you very much for taking the questions and I appreciate all the progress that was detailed on the call today.

I guess maybe.

A high level question would be in terms of kind of clinical development plans moving forward in terms of how they were previously articulated with.

The leadership of Raphael.

And.

How you may anticipate.

Is that being influenced with a new CMO in the near term future. So that would be one question.

The second question I would have is possible would be I note. Kevin It was really helpful to better understand the current kind of library that you have in terms of the TCR Ts.

Just curious if you could give us some indication in terms of cadence of bringing in.

New TCR Ts for example to bring up additional HLA matching for Egfr for example.

Thanks again for taking the questions.

Great. Thank you Chris.

We're very pleased with the direction that Rafi Ali assisted us with with regards to clinical development I believe we have a very strong and unique.

Now in place in clinical development plan, So I do not foresee wholesale changes with regards to a change in leadership at that level.

Still very much excited and focused on accruing patients at MD Anderson in our phase <unk> trial.

That's going to be our focus this year and preclinical you're continuing to make progress. So we can enter the clinic in 2023 with our membrane bound IL 15.

So we will continue to leverage.

Chris Bowden, who is.

Very experienced CMO and a very active board member and so we will work closely with Chris to make any adjustments or pivots as data comes in on the trial into continue to read from a clinical standpoint.

With regards to the cadence of the expansion of the TCR Library, certainly it's our goal to both increase the mutations that were going after you highlighted egfr in particular and we currently do have one TCR in our library that targets Egfr.

The Hunter program is really exciting and.

We will continue to identify new TCR is through that program.

To qualify those TCR and to get them added to the IMD.

<unk> is not an insignificant progress process I should say something that will take anywhere on the order of six to 12 months. So from a cadence standpoint, knowing that we just stood up our hunter platform.

<unk> been successful in identifying TCR is over the last few months with our Hunter platform I think it's fair to say that we would not see an expansion of the TCR library until the second half of this year at the earliest.

Okay, Alright, that's great I really appreciate it Kevin.

Aye.

Maybe I'll ask it anyway, I don't know if others are going to ask so with respect to the dosing levels that you've articulated.

In the phase one two study.

Any kind of commentary you would like to provide around the rationale of those dose levels.

And I guess, just as a clarification will that be kind of constant dose levels across.

The different TCR constructs that are different patient might see thank you.

Okay.

So we did a very before we set the dose levels. In this study we did a very expansive review.

Other companies' historical data and looking at dose levels that were out there. It was our belief that we wanted to try with a higher dose level in general a larger number of cells. Because in addition to safety, which of course is critical it was really our goal as well to reach an efficacious level with regards to dosing.

We also had the unique beige and designed to accelerate through the early stages of the dose levels, Chris and get to again, a place where we believe we will have a greater chance of efficacy. After all the reason that we're doing this is to treat cancer patients we want to make a difference in their lives and we are so motivated to do that and so as a result, we really.

To have a product that is both safe and efficacious and with regards to dose levels Thats. How we came up with the dose range that we have working very closely with our pies as well over at MD Anderson and at this point, we would anticipate regardless of the indication.

That we're targeting the same dose level that we would have in the trial. So we feel very comfortable with that and we will learn from it as well as we know this phase one we will learn from and as we identify that phase II dose level, our phase <unk> dose the optimum dose level.

Might be different depending on indications that's the learning we will get from this phase one trial.

Okay. Thank you.

Yes, Im sorry, Im sorry to interrupt excuse me.

No no great Chris. Thank you I appreciate your interest.

Our next question comes from Arthur <unk> with HC Wainwright.

Hey, Good morning, everyone. These officer, Inc. For Archie and congratulations on the progress this quarter.

Maybe I just wanted to follow up on the expansion of the <unk> mutation.

So my understanding is you guys are flexible to including more additional mutations into the current trial too.

To expand that library instead of launching another additional study is that correct.

Now I'll pass that to drew Arthur.

That is correct.

Awesome.

And.

Regarding the agreement with the National Cancer Institute could you guys give more color on the.

Extension.

The agreement.

If that.

Applied to the.

The <unk> no TCR.

The institution.

And any commentary there I appreciate it thank you.

Okay.

Yes, so with the NCI that is going to be our partner for personalized TCR T.

So we will be doing.

Our approach will be using the library approach, but the personalized TCR T approaches what our partnership with the NCI will be doing and we will be coming out later this year with more specific details around that as you are aware the NCI just reactivated these trials. So we'll be as we continue our relationship and have some more time pass.

We will be able to communicate more broadly with our investors about that specific trial and we'll look forward to providing updates further later in this year.

Alright, it sounds good thanks, Kevin.

Thank you.

Our next question comes from Thomas Flaten with Lake Street capital.

Hey, good morning, guys. Thanks for taking the questions Kevin I, just want to make sure I heard you correctly in the prepared comments.

Around one product per months can I read that is from a manufacturing perspective.

Can I read that as one patient per month is kind of a theoretical Max at this point from an enrollment perspective, or how should we think about steady pacing or enrollment pacing with respect to manufacturing capacity.

It's a great question and you did read the words correctly in the sense that that's our capacity.

It's very unlikely that you end up seeing a patient a month.

That could be done, but life happens not many patients that are ill no matter, how they are going to want to be infused.

Let's say between Thanksgiving and the Christmas holidays, they want to be spending time with their families with for what might be there last.

Holidays.

Insurance and scheduling and other things so it will be our best and it's our goal to us as safely and quickly enroll patients that are appropriate for this trial, but we will also be working in our GMP suite.

Dancing the preclinical program with IL 15, so there will be other products. So what I would say as we anticipate a full 100% utilization and our GMP suite throughout the year, but I think it would be unrealistic to presume that we would have a patient a month thats just not typically how it enrolls. So we don't have specific guidance at this time.

But knowing that we will be continuing to progress <unk> things, both pre clinically and doing other activities in our GMP suite.

We do not anticipate.

A patient per month at this point, but we'll just have to see how enrolment.

Seats.

And then with respect to so given that and I know you had talked previously about perhaps being the opportunity for data from the initial patients. In 2022 is that is that still feasible and do you see that being only in the context of a scientific meeting or is that would you have some other way of releasing that data to the investors.

Well certainly there is multiple ways, but I think the most credible way and the most likely way is at a scientific conference. We've spoken before a possibility about ESMO in September being inappropriate conference depending on the patients that we enroll there might be an indication specific conference that would be appropriate. So I think we'll just play it by ear will.

Worked closely with our pies as well to find the appropriate forum.

And we'll be in touch with investors appropriately about where we'll be presenting that data.

Excellent thanks for taking the questions.

Thank you.

Good ladies and gentlemen, if you have a question or a comment at this time. Please press. The Star then the one key on your Touchtone telephone. Our next question comes from Yale Jen with Laidlaw <unk> company.

Good morning, and thanks for taking the questions and congrats for the progress.

First question is that the first.

We ended the patient could you give us a little bit more color in terms of.

Pavel tumor.

He or she has.

I would love to Yale and thank you for your interest we will communicate information at a later point with regards to that specific patient after we.

Treat that patient and wait for the appropriate safety period would be the time that we will end up communicating with our investors and with the street with more information about that patient.

Two quick ones to follow the first one is that.

How many types of HL, a so far you'll have in that.

10.

February .

Prospect at this moment.

That's a good question and one thing I want to point you to is that we do have on our website and in our corporate deck.

A list of all 10 of the TCR that are currently in our library on slide 11 of that so if you look there and I'll, let drew answer the HLA question, but just do refer that we have tried to be transparent with our shareholders in that regard, but drew yes.

Eight different <unk> for 11, Tcr's excuse me <unk> I misspoke <unk>.

Great. Thanks, a lot and then maybe to ask a question here is that your lowest dose as the <unk>.

<unk> sales.

We considered that.

Potentially January efficacy signal or a simple lead that's just for the safety reason you want to have a lower dose.

Thanks for taking the questions.

No. Thank you Yale I think it's quite typical that we're focused on safety at first to make sure that we have a product thats safe as we're infusing it for the first time.

We would feel quite west if there ends up being any kind of efficacy signal and certainly wouldn't mind that for both the patient's sake and for ours.

But at this point is any phase one trial. The primary focus is on having a safe product inside of the human.

Okay, great. Thanks, a lot and again congrats on the progress.

Yes. Thank you I appreciate your continued interest.

I'm not showing any further questions at this time. This does conclude the presentation for today everyone. You may now disconnect and have a wonderful day.

Yes.

[music].

Ladies and gentlemen, thank you for standing by and welcome to the a lot of therapeutics fourth quarter and full year 2021 financial results Conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If you require operator assistance. During the program. Please press star Zero I would now like to turn the call over to your host Alex Lobo Stern Investor Relations.

Okay.

Good morning, and welcome to a lot of therapeutics fourth quarter and full year 2021 financial results conference call and audio webcast with me today are Kevin Boyle Senior <unk>, Chief Executive Officer, <unk>, <unk>, Vice President of research and development and Mike One our vice President of Finance.

Earlier this morning, <unk> issued a press release announcing financial results for the three months and full year ended December 31 2021.

We encourage everyone to read today's press release as well as be allowed US annual report on Form 10-K for the year ended December 31, 2021, which was filed this morning with the SEC.

The company's press release and annual report will also be available on the allowed us website at <unk> Dot com.

In addition, this conference call is being webcast through the Investor Relations section of the company's website and will be archived there for future reference.

Please note that certain information discussed on today's call is covered under the safe Harbor provision.

Private Securities Litigation Reform Act of 1095.

Participants are cautioned that this conference call contains time sensitive information that is accurate only as of the date of this live broadcast March 32022.

Actual results could differ materially from those stated or implied by forward looking statements made on bay today due to risks and uncertainties associated with the Companys business.