Q1 2022 Gracell Biotechnologies Inc Earnings Call

Okay.

Yes.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Gracell Biotechnologies first quarter 2022 conference call. At this time, all participants are in a listen-only mode.

Ladies and gentlemen, thank you for standing by and welcome to the cross sell Biotechnologies first quarter 2022 conference call. At this time all participants are in a listen only mode. After opening remarks, we will open the call for your questions instructions for queuing up will be given at that time.

Operator: After the opening remarks, we will open the call for your questions. Instructions for queuing up will be given at that time. I would now like to turn the conference over to Dr. Kevin Xie, CFO. Please go ahead.

Now like to turn the conference over to Dr. Kevin Shea CFO . Please go ahead.

Kevin Xie: Good morning, and welcome to Gracell's first quarter 2022 Corporate Update conference call and webcast. With me today are Gracell Saunder and the Chief Executive Officer, Dr. William Chow, and our Chief Medical Officer, Dr. Martina Serg. We're excited to discuss our innovative technologies and rich clinical pipelines of CAR T therapies on today's call. We also look forward to sharing with you our recent business developments and upcoming objectives for 2022. After our formal remarks, we will conduct a question and answer session this morning. Gracell issued a press release announcing unaudited financial results.

Good morning, and welcome to <unk> first quarter 2022.

Kevin Xie: But the quarter ended March 31st, 2022. We encourage everyone to read this press release. And we'd like to remind you that this call is being recorded.

This conference call and webcast.

With me today.

<unk> founder and Chief Executive Officer.

William Chow.

And our Chief Medical Officer, Malcolm Martinez search.

We're excited to discuss our innovative technologies and reach clinical pipelines of car T therapies on today's call.

We also look forward to sharing with you our recent business developments and upcoming objectives for 2022.

After our formal remarks, we will conduct a question and answer session.

This morning.

Resale issue.

This release announcing unaudited financial results for.

For the quarter ended March 31 2022.

We encourage everyone to read this press release and would like to remind you that this call is being recorded.

Kevin Xie: Please note that certain information discussed on the call today, including financial data, clinical data, and future plans of our programs, results management will be making a forward-looking statement; actual results could differ materially from those stated or implied by those forward-looking statements as a result of various important factors, and please refer to the risk factor section of our latest 20th finding with the SEC for a full disclosure of this risk and factor. This conference call contains time-sensitive information that is accurate only as of the date of this live forecast. May 16, 2022

Please note that certain information discussed on the call today, including financial data clinical data and future plans of our programs. We saw management will be making forward looking statements.

Results could differ materially from those stated or implied by those forward looking statements absolutely normal merit.

Factors.

And please refer to the risk.

Factors section of our latest 20-F filing with SEC, a full disclosure of these risks and factors.

This conference call contains time sensitive information that is.

Accurate only as of the date of this my forecast.

<unk> 2022.

Kevin Xie: Gracell undertakes no obligation to revise or update any forward-looking statements to reflect events and circumstances at the date of this conference, staff, as may be required by security. I will now turn the call over to Gracell's CEO, Dr. William Tsao.

Retail undertakes no obligation to revise.

Or update any forward looking statements to reflect events and circumstances. After the date of this conference call.

As may be required by Securities law.

Now I'll turn the call over to resell CEO , Bob <unk> <unk> William.

William Tsao: Thank you, Kevin. And again, I welcome everyone to our first quarter 2022 corporate update conference call. Gracell has made substantial progress over the past quarter and continues to deliver across corporate, clinical, and operational initiatives. I will elaborate on some of the key achievements so far and anticipated milestones over the next few quarters. Following this, I will turn the call over to our CMO, Dr. Matina Sesh, to discuss our clinical development, and then turn to our CFO, Dr. Kevin Xie, to discuss financial results.

Thank you Kevin.

And again welcome everyone to our first quarter 2022, corporate update conference call.

<unk> has made substantial progress over the past quarter.

And it continues to deliver across corporate clinical and operational initiatives.

I will elaborate on some of the key achievements so far.

And anticipated milestones over the next few quarters.

Following this I will turn the call over to al.

Our CMO, Dr Mattina fish to discuss our clinical development.

And then turn to <unk>.

Therefore, the Kevin sure to discuss financial results.

William Tsao: We are dedicated to developing our rich clinical pipeline with multiple clinical trials underway, including two IMD-approved trials and several investigator-initiated trials, or IIT for short. We continue to advance the IITs for GC012F, our autologous CAR T therapies, therapeutic candidates based on our fast car next day manufacturing plan. As announced, we will be providing updates from two out of the IIT studies at medical meetings in June. Concurrently, we plan to file R&D applications in the U.S. and China for GC012F for the treatment of relapsed refractory multiple myeloma, or RRMM for short, during the second half of 2022.

We are dedicated to developing our rich clinical pipeline with multiple clinical trials underway, including two R&D approve the trials and the several investigator initiated trials or <unk>.

For short.

We continue to advance.

For GC zero 12.

Oh autologous car T therapy.

Candidates based on how fast.

Next day manufacturing platform.

As announced we will be providing updates from two studies at medical meetings in June .

Concurrently we plan to file <unk> in the U S India, China for <unk> for the treatment of relapsed refractory multiple myeloma.

Hey man for short during the second half of 2022.

William Tsao: We are pleased that updated data from ongoing RIT evaluating GC012F for the treatment of RMM was selected for oral presentations next month at the BOSS Conference ESCO 2022 and EHA 2022. We look forward to sharing more details when the abstracts are posted on ASCO's and EHA's websites on May 26. At IHAR 2022, we also plan to present initial data from an ongoing IIT evaluating GC012F for the treatment of relapsed refractory B-cell non-Hodgkin's lymphoma, RRBNHL. We are very excited about this data, as it is the first time that we will be disclosing data for NHL.

We are pleased to.

Updated data from ongoing I T evaluating Tc zero 12 per.

Water treatment.

<unk> was selected as oral presentations next month.

Both conference ESCO 2022 and 2022.

We look forward to sharing more details when the abstracts were posted on <unk> and <unk> has a website on may 26.

In <unk> 2022, we also plan to present initial data from an ongoing.

Evaluating <unk> hundred 12.

For the treatment of relapsed refractory b cell non Hodgkin's lymphoma.

Uh huh.

Joe.

We are very excited about this data yes. It is the first time that it will be disclosing data for NHL.

William Tsao: This is yet another demonstration of our unwavering commitment to developing breakthrough cell therapy. Turning to the off-the-shelf 2U CAR platform, GC502 is our 2U CAR-enabled CD19-CD7 dual-directed allogeneic CAR-T cell therapy candidate. In mid-April and at the AACR annual meeting, we presented early results of a first in human clinical study of GC502 for the Dr. Sesh will expand upon GC502's progress shortly. In addition, we'll be presenting updated data from its RIT study in a poster presentation at IHA 2022 on June 10.

This is yet another demonstration of our unwavering commitment to developing breakthrough therapy.

Turning to debt.

After show to new car platform.

<unk> is our true <unk> enabled CD 19, CD seven do directed allogeneic car T cell therapy candidates.

Mid April and ACR annual meeting.

We presented early results.

First in human clinical study.

G C. Five O two photos treatment of relapsed refractory b cell acute lymphoblastic leukemia.

Hey al.

Dr. <unk> will expand upon GC firewall two's progress shortly.

In addition, we will be presenting updated data from this.

Study in a poster presentation at <unk>.

2022 on June 10.

William Tsao: In the beginning of the year, I mentioned this would be an active and exciting year for Gracell, as we expect multiple advancements across our pipeline. Our lead asset, 12F, on the fast car platform has expanded into its second indication, BNHL. The second candidate utilizing our allogenetic platform, GC502, which is also our first dual car allogeneic candidate, has presented promising early data at AACR. We're very pleased with the progress so far and look forward to presenting the three data sets at ESCO and EHA in June.

In the beginning of the year.

I mentioned this will be an active and exciting year.

Great Joe.

Should we expect a multi board advancements across our pipeline.

Our lead asset <unk> 12 on the <unk> com platform.

Spending to second indication be NHL.

Secondly candidates utilizing our allogeneic.

<unk> Com platform GC follow too, which is also our first dual allo genetic Kennedy.

Presented promising early data.

ACI.

We are very pleased with the progress so far and look forward to presenting b, III datasets and ESCO and at <unk>.

In June .

William Tsao: It is worth highlighting that on Code Break's side, we plan to host an investor update call shortly after ESCO and EHA to share this data. We continue to invest in our R&D and manufacturing capabilities. In the first quarter, we expanded our US presence with the opening of our San Diego Innovation Center. We're also continuing to actively expand our US teams. Next, I will provide a few updates regarding our operations in China during the recent COVID-19 pandemic outbreak. Starting in late February 2022, due to the spread of the highly contagious Omicron variant in China, the Chinese government imposed stricter restrictions, including lockdowns in certain cities and the district, which includes Shanghai.

It is worth highlighting that we plan to host an investor update call shortly after ESCO and <unk> to share the data.

On corporate side with.

We continue to invest.

R&D and manufacturing capabilities in the first quarter, we expanded our U S presence with the opening of our.

San Diego Innovation Center.

We are also continuing to actively expand our U S teams.

Next I will provide a few updates regarding our operations in China, given the recent COVID-19 pandemic outbreak.

Starting in late February 2020 to do.

Due to the spread of the highly contagious Ami chrome bearing in China.

Annie's government imposed stricter restrictions, including Lockdowns in certain cities.

Which includes Shanghai.

William Tsao: As a result, we are experiencing disruptions to our operations in certain cities, for example, short-term logistical issues as well as impacts on patient follow-up and treatment. We believe that the continued lockdown may temporarily impact our business. But at this point, our clinical development targets and timelines remain unchanged for the full year. Moreover...

As a result, we are experiencing disruptions to our operations in certain cities.

For example.

Logistic issues as well as impact on patient follow up and treatment.

We believe that the continued lockdown may temporarily impact our business.

But at this point.

Our clinical development targets and timelines remain unchanged for the full year.

Moreover.

William Tsao: I would like to take a moment and sincerely thank our team and our primary investigators, who continue to work relentlessly and help minimize the impact on patients. During the first five months of 2022, we will demonstrate the continued advancement of our clinical programs. As we head into the spring, we are focused on the following initiatives. We plan to file for R&D in the U.S. and China for GC012F for the treatment of relapsed refractory multiple myeloma during the second half of 2022. We are seeking to establish partnership for one or more programs.

I would like to take a moment and I sincerely thank our team.

Our primary investigators.

So we'll continue to work relentlessly and help minimize the impact on patients.

During the first five months in 2022, we demonstrated the continued advancement of our clinical programs.

As we head into the spring.

The following initiatives.

We plan to file the R&D in the U S.

In China for <unk> for the treatment of relapsed refractory multiple myeloma.

In the second half 2022.

William Tsao: This is a key priority for 2022. Currently, we have two R&D trials and three IIT studies ongoing, and also two recently completed IIT studies. We expect to present clinical data updates from IIT for two of our product candidates in three indications at both ESCO and EHA in June. We anticipate additional updates at major medical conferences in the second half of 2022. Meanwhile, we're advancing our early pipeline candidates and are on track to bring our first smart car candidates for solid tumors into the clinical stage this year.

We are seeking to establish partnership for one or more programs. This is a key priority for 2022.

Currently.

Two R&D trials and a three <unk> studies ongoing.

And also two recently completed studies.

We expect to present clinical data updates from high <unk> for two of our product candidates.

Three indications and are both ESCO and <unk> high and Jim.

Anticipate additional updates at major medical conferences in the second half of 2022.

Meanwhile, we are advancing our early pipeline candidates and are on track to bring our first small.

<unk>.

Candidate for solid tumors into clinical stage this year.

William Tsao: We also plan to expand our manufacturing capacity by developing a second facility in Suzhou, China. In addition to our State-of-the-Art 6,000 square feet GMP manufacturing facility, the second facility will feature full closed production capabilities to reduce contamination risk and optimize Cost Efficiency.

We also plan to expand our manufacturing capacity by developing a second facility.

So China.

In addition to our.

State of loss.

6000 square feet GMP manufacturing facility.

The second facility will feature.

We'll disclose full closed production capabilities to reduce contamination risks.

And optimized cost efficiency.

William Tsao: These clinical and operational developments will bring Gracell closer to delivering accessible and highly efficacious treatments for patients across a wide range of malignancies. Now, I will hand over the call to our CMO, Dr. Matina Sesh, to discuss the pipeline and our clinical program. Matina, please go ahead. Thank you, William.

These clinical and operation developments will bring griso closer to delivering accessible and highly efficacious treatments for patients across a wide range of malignancies.

Now I will hand over the call to our CMO, Dr. Tina fish to discuss the pipeline and our clinical programs.

Latina. Please go ahead.

Thank you William Gray seller is currently developing highly differentiated pipeline of multiple autologous and allogeneic product candidates for the treatment of different types of cancer.

Matina Sesh: Gracell is currently developing a highly differentiated pipeline of multiple autologous and allogeneic product candidates for the treatment of different types of cancer. As William mentioned, we were able to extend the clinical development of our lead candidate, GC012F, a dual-targeting BCMA CD19 autologous CAR-T, into a second indication, BNHL. Moreover, GC012F is the first DCMA-CD19 dual-targeting CAR-T in the clinic for this indicator. GC012F is manufactured on our fast car platform, which enables overnight manufacturing.

As William mentioned, we were able to expand clinical development of our lead candidate GC 12 F. A dual targeting <unk> CD 19, autologous car T onto a second indication P&L shall mark.

Moreover, <unk> fall back Mr. Fred <unk> towards targets from <unk> in the clinic for this indication.

This is Eva trial fastest manufactured on a fast car platform, which enables overnight manufacturing.

Matina Sesh: We applied for and received US FDA orphan drug designation for relapsed and or refractory multiple myeloma in 2021 and previously recorded interim clinical data from the IIT in relapsed refractory multiple myeloma at conferences in previous years, including ASH, ESCO, and EDM. We are very excited that the updated data on our multicenter IIT study in RRMM was accepted as an oral This data is subject to embargo, and we will be able to provide more details on May 26 after the embargo is lifted and the abstracts go online, as well as after the presentations take place on June 5th at ESSO and on June 12th at.

We have applied for and received U S FDA orphan drug designation for.

A relapse and refractory multiple myeloma and <unk> 2021 on previously reported interim clinical data from the Iot in relapsed refractory multiple myeloma at conferences.

Yes, including Ash ethical anyhow.

We are very excited about the updated data on our multi center study.

Study in <unk> and.

<unk> has accepted as oral presentation for both <unk> and.

Thank you too.

This data is subject to embargo and we will be able to provide more detail on may 26. After the embargo is lifted and the abstracts go online.

As well as after the presentation take place until state that asphalt and I am showing 12 FTE.

Matina Sesh: As William mentioned, we are also planning to hold update calls shortly thereafter to discuss the data. We believe the preliminary data holds high promise and remains very competitive, both from an efficacy and safety standpoint in the landscape of autologous CAR-T therapy, as well as the key differentiator of next-day manufacturing, which may lead to a faster availability of treatment to patients, while also potentially avoiding or shortening the need and duration of bridging therapy. We are also currently enrolling patients into an IIT study in China to evaluate TC012F for the treatment of BNHL. Early data from this trial will be presented at IHA next month. Most BNHL cells express the CD19 protein.

As William mentioned, we are also planning to hold update call. Shortly thereafter to discuss the data.

We believed the preliminary data for high promise and remains very competitive.

From an efficacy and safety standpoint in the landscape of our trial.

It is quite key therapies as well as the key differentiator of next day manufacturing, which may lead to fast availability of treatment to patients, while also potentially avoiding or shortening that you didnt duration of bridging therapy.

We are also currently enrolling patients into an IHG steady in China to evaluate gcs newer talk that the treatment of BNS shell.

Early data from this trial will be presented at <unk> next month.

Most BNS shelf belt Express CD 19, and there are several CD 19 targeted patchy therapies already approved in the United States and currently moving into earlier lines of therapy.

Matina Sesh: And there are several CD19-targeted Patti therapies already approved in the United States and currently moving into earlier lines of therapy. However, literature suggests that 39% to 97% of NHL cell samples also express DCMA in addition to CD9. By simultaneously targeting DCMA and CD19, GC012F is designed to improve efficacy outcomes in relapsed refractory BNHL patients while maintaining an acceptable and manageable safety profile. Moving on to the Allogeneic TrueUCA platform, our CD19-CD7 dual-directed allogeneic RT candidate, GC502, is the second candidate in the clinical stage on our TrueUCA platform. And the first candidate was the dual-directed CAR design.

Literature suggests that 39% to 97% of NHL cell samples also express <unk>. In addition to CD 19.

By simultaneously targeting <unk> and CD 19, GCC would fall fast is designed to improve efficacy outcome in relapsed refractory NHL patients.

Gaining an acceptable and manageable safety profile.

Moving onto the allogeneic platform, our CD mindful seven toward directed Allogeneic car T candidate <unk> five <unk> is the second candidate in clinical stage on I'll ask for your car platform and the first candidate was the door directed patent side.

Matina Sesh: We presented early results of a first-in-human clinical study of GC502 for the treatment of relapsed refractory BLL on April 12 at AACR 2020. These early results demonstrated the potential of our allogeneic off-the-shelf CAR-T therapy for patients with BALL, including those who had previously received autologous CAR-T treatment. Our novel design of dual-directed cars utilizes one car, a CD7 car, to suppress post-versus-graft rejection.

Presented already resolved officer in human clinical study of GC FIFO tool for the treatment of relapsed refractory B L.

On April 12 at ACR 2022.

The early read.

<unk> demonstrated the potential of our allogeneic off the shelf car T therapy for patients and B a L L, including those who had previously received autologous car T treatment.

Our novel design of well directed pass utilize this one car SGD seven car, so suppressed host versus graft rejection.

Matina Sesh: This car has been optimized for induction of appropriate immunosuppression, and we are utilizing a second car to target a specific cancer antigen, which can be adjusted for different types of cancers. TrueUCA is designed to reduce the risk of rejection of allogeneic heart T cells by patients' immune systems without the need for additional immunosuppressive therapies after the lympho-depletion. In the preliminary data set presented at AACR last month, four relapsed refractory BLL patients were enrolled and treated in an open-label, non-randomized, prospective IIT study in China at two different dose levels between September 2021 and All patients were heavily pre-treated and had previously received either autologous or donor-derived CD19 or CD19-CD22 targeted CAR T therapy.

This car has been optimized for induction of appropriate immuno suppression.

And we are utilizing a second car to target a specific cancer antigen, which can be adjusted for different types of cancer truly you guys decide which is risk of rejection of allogeneic car T cells by patients immune system without the need of additionally, immunosuppressive therapies offer that.

For depletion.

In the preliminary data that's presented at ACR last months for relapsed refractory <unk> patients were enrolled and treated in an open label non randomized prospective study in China in two different dose levels between September 2021, and January 2022.

All patients were heavily pre treated <unk>.

He received either autologous or donor derived CD 19, or CD 19, CD 22 targeted car T therapy.

Matina Sesh: As of January 28, 24, 24 patients had received a single dose of GC502, including one patient at a dose level 1, 1 times 10 to the 7 cells per kilogram, and three patients at dose level 2, 1.5 times 10 to the 7 cells per kilogram. Patients received a flu shot and lipid depletion prior to treatment with GC502. Three out of four patients achieved minimal residual disease, negative complete response, or complete response with incomplete recovery. One patient achieved a partial response once and subsequently received allogeneic HSCT on day 39. Cytokine release syndrome (CRS) presented as grade 2 and grade 3, and no grade 4 or grade 5 events were observed.

As of January 28.

Four patients had received a single dose of Jeep FIFO too, including one patients at a dose level. One one times 10 to the seven cells per kilogram and three patients at dose level 215 times 10 to the southern South Texas milligram patients received a smooth.

It looks pretty cashman prior to treatment with GC FIFO too.

Three out of four patients achieved minimal residual disease negative complete response or complete response with incomplete recovery one patient achieved a partial response on this one and subsequently received allogeneic HSC team on day 30 now.

How do we lease Sunrun Crs transcended the grade two and grade three and no grade four grade five events well obsessed.

Matina Sesh: DRS in all patients was manageable and resolved after treatment with ruxolitinib, standard of care, and supportive care; no immune-affected cell-associated neurotoxicity syndrome, ICANS, or acute graft-versus-host disease, AGBHD, were observed. We are very encouraged by these early results, which show the potential of GC502 and warrant further evaluation in the clinic. Being the second product candidate from our Allogeneic to UCAR platform, GC502 further validates UCAR's platform approach and potentially wide applicability. The other candidate from the TrueUCA platform is GC027, a CD7-targeted CAR T-cell therapy for the treatment of T-cell acute lymphoblastic leukemia, TALL.

And all patients was manageable and resolved after treatment with Sunitinib, the standard of care and supportive care.

Knowing unit effector cell associated neurotoxicity syndrome I Ken.

Acute graft versus host disease Gvhd, we're upset.

We are very encouraged by these early results, which showed the potential of GC FIFO too and warrant further evaluation in the clinic.

Being the second product candidate from our allogeneic platform GC FIFO to further validates <unk> set form approach and potentially wide applicability.

Yeah. The candidate from the <unk> platform S. GC devote 27, SPD <unk> targeted car T cell therapy for the treatment of T cell acute lymphoblastic leukemia T. A L L.

Matina Sesh: We have previously recorded promising efficacy and safety data at ASDR 2021 and have since added more patients to the study. Currently, we are targeting regulatory interactions globally and in China during the next 12-month period. In addition to our IIT program and multiple indications, we have two IND studies open and enrolling patients in China, including GC019F, which is also manufactured on the Fast Car platform. Our most advanced program is GC007G. Currently, a registrational Phase 1-2 clinical trial under a Chinese IND is ongoing for the treatment of RRB-ALL.

We have previously recorded the promising efficacy and safety data at ACR 2021, and Epson added more patients to the study.

Currently we are targeting regulatory actions globally and in China. During the next 12 month period.

In addition to our Iot program in multiple indications, we have two R&D studies open and enrolling patients in China, including <unk> 19, App will just also manufactured on the box platform.

Our most advanced program is <unk>.

<unk>.

Currently our Registrational phase one two clinical trial under a China A&D.

Is ongoing for the treatment of <unk> patients.

Matina Sesh: We anticipate commencing the phase two part of the study soon. GC007G is a novel treatment option for patients that have relapsed after transplant and may not be eligible for autologous CAR-T therapy. GC007G represents a new approach and is manufactured using healthy donor-derived HLM-matched T-cells, offering an advantage over a patient's own T-cell. Beyond the programs discussed today, we have an exciting early stage pipeline of product candidates based on our fast car and TrueU car technology platforms and smart car technology module for several indications, including solid tumors and hematological malignancies that we continue to evaluate to move forward into We are on track to commence enrolling in a China IIT study for GC503 in mesothelium-positive solid tumors in 2022 and plan to commence a China IIT study for GC506 in chloridine 18.2-positive solid tumors.

We anticipate commencing the phase II part of the study soon she sees <unk> as a novel treatment option for patients that have relapsed after transplant and may not be eligible for autologous car T therapy.

<unk> 70 represents a new approach and as manufacturers using healthy donor derived HLA matched T cell.

Offering an advantage of our patients on T cells.

Beyond the programs discussed today, we have an exciting early stage pipeline of product candidates based on our Pascal and <unk> technology platforms, and smart car technology module for several indications, including solid tumors and hematologic malignancies that we continue to have.

Evaluate to move forward into the clinic.

We are on track to commence enrolling in a China IDE study for GC, five or three and that will sell in positive solid tumors in 2022 and plan to commence a China IHG for GC, five or six and Claudine 18, two positive solid tumors.

Kevin Xie: To support our pipeline development, we are actively expanding our team, including regulatory and clinic operations teams in the United States. Thank you, Markina. Turning to our financials, I'd like to touch on a few financial trends, as of March 31st, 2022, company had RMB 1,694.7 million for US dollar $257.3 million in cash and cash equivalents and short term investment. We are very well funded this cash runway into 2020. We expect the cash use for this year to be approximately 100 million to 120 million US dollars, primarily to fund our R&D and the technical programs in the US and China, and to support expansion of our GMT manufacturing facilities in the U.S, that lost attributable to ordinary shareholders for the three months ended March 31st, 2022 with RMB 158.6 million or U.S. dollar 25.0 million, compared to RMB 99.7 million for the corresponding period in the fire year.

To support our pipeline development, we are actively expanding our team, including regulatory and clinical operations team in the United States.

Thank you Martina.

Kevin Xie: Research and development expenses for the three months ended March 31, 2022 for RMB 121.8 million, or U.S. dollar 19.2 million, compared to RMB 65.4 million in the corresponding period on Friday, the increase was priority due to the increase in spending on R&D and clinical trials as well as higher payroll and personnel expenses attributable to increased headcount and the higher facility-related administrative expenses for the three months ended March 31st.

Turning to our financials I'd like to touch on a few financial trends.

As of March 31, 2022.

The company had RMB 1 billion $694 7 million.

Or U S dollar $267 3 million.

Cash and cash equivalents.

Short term investments.

We are very well funded with cash runway into 2020.

We expect the cash use for this year to be approximately 100 million to 120 million U S. Dollar primarily to fund our R&D and clinical programs in the U S and China.

And to support expansion of our GMP manufacturing facilities.

Joe.

Net loss attributable to ordinary shareholders for the three months ended March 31.

122 was RMB $158 6 million.

Our U S dollar 20 510 million.

Compared to RMB $99 7 million for the corresponding theory.

Sorry.

Research and development expenses for the three months ended March 31 2022.

RMB 121 8 million.

Or U S dollar and $19 2 million.

Hard to RMB 65, 4 million in the corresponding period in <unk>.

Sorry.

The increase was primarily due to the increase in spending.

R&D and clinical trials as well as higher payroll and the personnel expenses attributable to increased head count and the higher facility related costs.

And with <unk> expenses for the three months ended March 31.

2022 were RMB $77 9 million.

For U S dollars $19 2 million.

Paired to RMB $71 8 million for the corresponding period in the prior year.

Kevin Xie: 2022 for R&D 37.9 minutes, for U.S. dollars 19.2 million, compared to RMD's 31.8 million for the corresponding period in the party, and I'd like to turn it back to the operator to open the session for your questions. Operator. Thank you. To ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Again, that's star 1 to ask a question. Our first question comes from Joe Catanzaro with Piper Sandler. Your line is open. Hey everybody.

With that I'd like to turn it back to the operator to open the session for your questions operator.

Thank you to ask a question you will need to press star one on your telephone.

To withdraw your question press the pound key again Thats star one to ask a question.

Our first question comes from Joe Kenton, Kenton Zoro with Piper Sandler Your line is open.

Joseph Catanzaro: Thanks so much for taking my questions here. Maybe one first on the GCO-12F plan, USIND, and whether you've had any recent discussions with the FDA and what would be the appropriate starting dose, and maybe along those lines, where you stand at potentially tying back the U.S.-generated product back to the data you've generated in the China IIT. Thanks, and I have a follow-up question. Martina, maybe you should take this question. Yeah, I'm not sure. Can you clarify what you mean by that question? I'm not sure if I understand it correctly.

Hey, everybody. Thanks, so much for taking my questions here, maybe one first on the <unk> hundred 12 planned U S D.

Whether you've had any recent discussions with the FDA and what would be the appropriate starting dose and maybe along those lines where you stand.

And potentially tying back the U S generated product back to the data that you've generated in.

China.

Thanks, and I have a follow up for Tim.

Mattina maybe.

Maybe you should take this question.

Im not sure Ken can you clarify what you mean by that question I'm not sure if I understand this correctly.

Joseph Catanzaro: Sure, sure. But the intention was not, correct me if I'm wrong, to be able to tie back the product manufactured at Lonza in the U.S. site back to the China IIT data and then maybe build off of that what the appropriate starting dose would be within the planned U.S. study. Hopefully, that clarifies things a little. I'm not 100% certain what you are asking, but let me give you a little bit of detail. Our strategy is based on the data we have generated in China.

Sure sure the intention was not.

And correct me, if I'm wrong to be able to tie back the product manufactured out of London, and the U S side back to the China <unk>.

Data and then maybe build off of that what the appropriate starting dose would be within the plan. The U S study hopefully that clarifies a little bit.

So I'm not certain what you're asking but let me give you a little bit of detail. Our strategy is based off of the data we have generated in China.

Joseph Catanzaro: And the tech transfer and the manufacturing process from China are being transferred to the United States. So yes, we are intending on using the data generated in China. Okay, I guess I'm just wondering sort of where the process stands along those lines in terms of, you know, Lanza's sort of manufacturing runs and being able to demonstrate, I guess, comparability to the product you generated in China.

And the tech transfer and the manufacturing process from China has been transferred to the United States. So yes, we are intending on using the data generated in China.

Okay.

Just wondering sort of where the process stand along those lines in terms of.

Rhonda sort of manufacturing runs and being able to demonstrate comparability to the product you generate out of China.

Joseph Catanzaro: Yeah, this is moving slowly, as we had mentioned during the call, so the tech transfer is going as, Okay, got it. And then, and then maybe on the O12f myeloma update you guys expect in June, maybe you could just help frame up what we should expect to see there. Is it just going to be longer follow-up from the cohort of patients we've seen, or will there be new patients, more dose levels, or anything along these lines? This data is still confidential as it is embargoed through ESCO.

Yeah. This is moving slowly as we had mentioned during the call also the tech transfer is going as planned.

Okay got it and then maybe on the <unk> myeloma update you guys expect in June maybe you could just help.

Frame up what we should expect to see there is it just going to be longer follow up from the cohort of patients. We've seen are will there'll be new patients more dose levels anything along those lines.

So this data is the confidential s's embargo through ESCO, we unfortunately at this point in time cannot.

Joseph Catanzaro: Unfortunately, at this point in time, we cannot speak to any of the details. We will be able to as soon as the abstract has lifted the embargo, which will be on the ESCO website. Okay, and then maybe last one from me. I think we've recently seen some CAR T data targeting CLAWD in 18.2.

Speak to any of the detail, we will be able to as soon as the abstract has lifted the embargo, which will be on the <unk> side.

Joseph Catanzaro: So wondering what you see as the biggest takeaway from this data and where you see the clear opportunity for your program? Okay, now maybe I, you know, can give a crack on this. It is always, you know, our Gracell's designing goal, if you will, in a philosophy. South Therapy is not a simple product, and it's a pretty pricey product. So what we hope to see is, For any big indication, particularly for solid tumors, the response has to be deeper than you know, temporarily shrinking down a tumor and 40-50% PR. As for trying to wear patients' shoes, they have to go through a long process and pay very expensively, not just the khaki, also expensive, related to healthcare.

Okay, and then maybe last one for me.

We've recently seen some car T data targeting Claude and $18. Two so wondering what you see as the biggest takeaway from from those data and where you see the clear opportunity for your program.

Okay.

But they're not maybe.

Okay, let Craig comment.

No.

As always.

Our great so.

Designing goal if you will.

And our philosophy.

Yes.

<unk> therapy is not.

A simple product and I'd say its a.

Pretty pricy product.

While we hope to see is.

Any.

Big indication.

Particularly for solid tumor.

The response has to be deeper than.

Temporarily shrinking down the tumor.

40, 50% in the PR.

Trying to wear patient shoes optical into loan process and then.

Pay very expensive.

Not just the car T also expensive.

Related to the health care.

Joseph Catanzaro: You know, the response has to be good enough to convince the patients and doctors. So we hope our design can bring up the response in a way that is deeper and at a higher percentage. And so I can't describe in what kind of detail the response we are designed for because you can't, right? It's from preclinical to clinical is a big leap, but at least that is what we are working on. I have a philosophy and then long-term goals.

The response has to be.

Good enough.

<unk> the patients and doctors.

So we hope our design can be.

Brenna.

The response.

In a way that a depot and then a higher percentage.

I can't describe what kind of a detail the responsive design for because we you can see it.

Preclinical to clinical is a big leap.

This is Dennis.

Sure.

Philosophy, and then long term goal.

Joseph Catanzaro: Okay, got it. Thanks for taking on my. Thank you. Good question.

Okay got it thanks for taking all my questions there.

Thank you good question.

Operator: Our next question comes from Kelly Xie with Jeffreys. Your line is open. Thank you for taking my questions. So for the US-Indy filing of GC012F in the second half, we'll end with Aloma, also potentially including the NHL. Oh, the NHL will just come later.

Our next question comes from Kelly <unk> with Jefferies. Your line is open.

Alright. Thank you for taking my question so for the U S R&D filing of GCI.

In the second half.

Uh huh.

<unk> also potentially including NIH out.

The NHL will just come later.

Kelly Xie: And secondly, as Gracell continues to grow its pipeline, I'm wondering which programs you would be focused on for clinical development in the US beyond the GC012F? For example, the smart CAR-T tech enabled in the Cecilian and Claudia 18.2 targeted programs. Are you planning for the tech transfer and the US IMD filing in the near term? Thank you. Yeah, Matina, I think it's better for you to take that first. So again, I'm not 100% certain, Kelly, what you are asking here; are you asking if we should submit BNHL separately?

And secondly, as Luckily shall continue growing pipeline I'm wondering which program will be focused at all for the clinical development. The USB Yamagishi 12 Ash for example, the smart car T packing neighborhood and Mr. Kelly and quality I can point to any of the programs are you planning.

For tech transfer in the U S Anda filing in the near term. Thank you.

Yes.

Better for you to take that first.

Kelly Xie: Is that your question? Okay, yeah, let me clarify my first question. You are planning a USMD filing for GC012F in the second half, in the second half for relapse and refractory multiple myeloma. I'm just wondering for the NHL indication, are you planning to do it at the same time or later?

Sure. So again, another 100% certain Kelly what you are asking here are you asking if we.

Submit BNS shelf separately.

Is that your question.

Okay. Yeah, Let me clarify my first question you are planning, yes, and the filing for <unk> zero to up in the second half looks.

Second half for relapsed and refractory multiple myeloma, just wondering for the NHL indication are you planning to do at the same time all later.

That's my first question I hope it helps.

Kelly Xie: That's my first question. I hope it helps. Thank you. Thank you. Very helpful. So we are not discussing the BNHL strategy at the moment, but we are definitely actively looking into all available options to shorten our development timelines for the totality of the program.

Yes.

Yeah. Thank you. Thank you very helpful. So we are not discussing the BNS shell's strategy at the moment, but we are definitely actively looking into all available options to shorten our development timelines for the totality of the program.

Yeah.

Kelly Xie: Thank you. Our next question comes from... Go ahead. Yeah, I think Kenny has a second question about the smart car key. Are we going to file tech transfer and file R&D in the US soon? I guess that's the question. Yeah, thanks. Martina thinks there is a lag.

Thank you our next question comes from.

Go ahead, I think Kenya, and he had a second question about small car T. I, we're going to file a tech transfer in the.

In the U S. Soon.

I guess, that's the question.

Yes. Thanks.

Kelly Xie: Yeah, let me just take that one because we asked, you know, still early carry for the smart car. We're not having, present any data yet. We don't have data yet. Traditionally, we do IITs to de-risk product development.

Yes, Martin I think there is a lag.

Let me just take that one because.

It's still early county for the small comp.

<unk>.

Sure.

Present any data yet we don't have data.

Yes.

Traditionally we do.

She is to de risk the product development. So we have not reached at.

Kelly Xie: So we have not reached that decision point. As soon as we have a certain amount of clarity, then we can, you know, address your question in more detail. Thank you. Thank you. Our next question comes from Nick Abbott with Wells Fargo. Your line is open.

Decision point yet.

As soon as we have a certain clarity then we can address your question more detail.

Thank you.

Sure.

Thank you. Our next question comes from Nick Abbott with Wells Fargo. Your line is open.

Nick Abbott: Good morning, thanks for taking my question. Just a question on 502, given that we saw the initial data at the AACR last month. I'm just wondering what we should expect. Thank you. Yeah, that's definitely Martina's question.

Hi, Good morning, Thanks for taking the question just a question on five O. Two given that we saw data initial data.

Yes.

Last month, so I'm just wondering what we should expect.

The update in terms of follow up on those original patients, but also <unk>.

New patients different doses. Thank you.

Yes, definitely Bettina question, yes. Thank you.

Nick Abbott: Yeah, thank you. So Nick, the ACR deadline and the ESCO-EHR deadlines are unfortunately very close together, so the data is what was submitted basically at the last possible time point for data to be cut to have it submitted to the conference. And what you see online for IHER is what would be that data that we are going to be presenting at. Okay, thank you.

Nick.

ACR deadline, and ESCO Ehow deadlines, and unfortunately, very close together. So the data is what was submitted basically.

A time point possible for data to have it submitted to the conferences.

And.

What you see online.

<unk> is what was what would be the data that we are going to be presenting at ehealth.

Okay.

Thank you.

Operator: Thank you, and I'm showing no further questions at this time. I'd like to turn the call back to Dr. William Cao for any closing remarks. Thank you, everyone, again, for joining us on the call. Our clinical trials are progressing. And we look forward to presenting data from three ongoing IIT trials at ESCO and EHA in early June. Our R&D and clinical teams in China continue to timelessly advance our trials and treat patients, given the backdrop of the lockdown restrictions that have been in place in Shanghai since late March for the next few quarters.

Thank you.

And I'm showing no further questions at this time I would like to turn the call back to Dr. William So for any closing remarks.

Thank you everyone again for joining us on the call.

Our clinical trial is progressing and we look forward to presenting data from three ongoing trials ESCO and <unk> high in early June .

Our R&D and clinical teams in China continue to timely flea and advance our trials and to treat patients.

Even the backdrop of the lockdown restrictions.

That has been in place in Shanghai since late March.

Over the next few quarters.

Operator: We're focused on securing and developing partnerships as one of our key goals of this year. I'm preparing the U.S. and China ANDE filings anticipated later this year. In conclusion, Gracell is well positioned to deliver breakthrough CAR T cell therapies capable of overcoming major industry challenges by leveraging our proprietary fast car and two-wheel car technology platform.

We are focused on securing.

Developing partnership as one of our key goals of this year.

And preparing the U S and China and the filings anticipated later this year.

In conclusion, <unk> is well positioned to deliver breakthrough car T cell therapies capable of.

Overcoming major industry challenges by leveraging our proprietary first call and to your kind of technology platform.

William Tsao: And we look forward to further advancing our clinical programs, and we'll keep everyone updated along the way. Thank you. Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect.

And we look forward to further advancing our clinical programs and we'll keep everyone updated along the way.

Thank you.

Ladies and gentlemen. This concludes today's presentation. Thank you once again for your participation you may now disconnect.

Okay.

[music].

Yes.

Okay.

Yeah.

[music].

Yes.

Okay.

[music].

Great.

Yes.