Q3 2022 Precigen Inc Earnings Call
For a more complete discussion of these risks and uncertainties.
I will now turn the call to Dr. <unk> Alan Thanks.
Thanks, Steve and thank you for joining us today.
I'm pleased to report to you today that prestige and made significant progress during the third quarter of 2022 by focusing on the assets in our portfolio offering the greatest potential for increasing shareholder value in the most efficient way possible.
<unk> is our mantra here at press adjourn and our strategy is straightforward first we focus on markets with ultra high unmet need.
The indications we are pursuing offered the potential for an accelerated regulatory and developmental pathway.
We continue focusing our research development and manufacturing operations by making early decisions to pursue therapies with higher probabilities of success.
The ability to create consistent manufacturing at multiple sites also figures into our decision, making as we seek to decreased product costs and provide therapeutic access to a broader patient population.
We need to move away from traditional concepts of centralized manufacturing, especially when we are dealing with patient population suffering from diseases, where earlier treatment makes a big difference.
Finally, we are focused on advancing therapies that are not only differentiate that in their utility, but also potentially in their pricing as we change the paradigm in manufacturing and development.
I will talk about how our ultra operator technology is proving to be a game changer when it comes to enabling overnight local manufacturing and distribution.
We believe that we are entering a new era of value based care and want to be ready with products that meet the future requirements of our healthcare system.
Another area of focus is fiscal discipline. Thanks.
Thanks to our efforts we have reduced the cost of SG&A and are now allocating further resources towards our clinical and commercialization efforts.
I will now update you on our clinical programs.
First our adding a worse immunotherapy platform.
For <unk> in 2012 in recurrent respiratory papillomatosis or <unk> P. A devastating orphan disease with severe unmet medical need as reoccurring surgeries remained the only option for these patients.
The burden on these patients is immense.
With many requiring hundreds of lifetime surgeries at a very high cost.
Furthermore, recurring surgeries only temporarily treat the symptoms of RFP and do not lead to remission.
These surgeries can actually worsened the condition of our RFP over time as it can increase the spread of the virus, leading to co morbidities, including significant breathing problems and lots of Walpole function.
There is an urgent need for a therapeutic treatment options such as a <unk> 2012 PR.
<unk> 2012 has been the orphan drug designation for patients with RP.
We are extremely pleased with the rapid progress of this clinical program.
To recap we dose the first patient on the phase one study in March 2021 viewing the highest heights of the COVID-19 pandemic.
Enrollment and dosing are complete in the phase one dose escalation and dose expansion cohorts with 15 patients treated and 12 months falloff is near completion.
<unk> 2012 has demonstrated an excellent safety profile with all subjects, receiving food and treats.
Treatment course, with four <unk> in 2012 administration.
That has been no dose limiting toxicity and no treatment related adverse events greater than grade two.
We are looking forward to presenting what we believe will be highly compelling safety and efficacy data from the dose escalation and expansion cohorts of PRT in 2012.
The virtual R&D event in early January 2023, which is timed to coincide with the 41 annual Jpmorgan healthcare conference.
Yeah.
We believe there is a significant market opportunity for this drug in RFP.
Our estimate of the U S EU adult and juvenile patient population is approaching 8000 cases.
We feel there are substantial case numbers outside of the U S and EU that could bring the global population to over 75000.
We also believe that due to limited disease awareness reported numbers could understate the true prevalence of this disease.
This could present a market opportunity for the U S any EU alone of over $1 billion.
These are preliminary estimates and we plan to provide further details on the patient population burden of the disease on patients and market opportunities during the data presentation.
Dr. <unk> claimed to Allen scenario investigator at NIH and the lead associate investigator for <unk> 2012 clinical trials will lead the presentation.
At the same time I am pleased to report that enrollment in the phase II study is progressing rapidly with 16 patients enrolled to date.
Given the high unmet medical need for this patient population, we have been in ongoing discussions to evaluate the various regulatory path.
FDA.
Now for an update on <unk> in 2009 are adding diverse immunotherapy in HPV associated cancers.
We completed enrollment in the phase one monotherapy and combination arm with six and 11 patients enrolled respectively.
All patients were stage for recurrent or metastatic HPV associated cancers.
And failed multiple prior therapies, including checkpoint inhibitors.
Interim data from the phase one combination arm.
Eminence straightened encouraging safety and efficacy with the 40% objective response rate.
Complete and partial responses.
In a patient population that has failed previous checkpoint inhibitor treatment.
Patient follow up is ongoing and we are looking forward to hosting an investigator led phase one data presentation in the first half of 'twenty two 'twenty three.
Enrolment is near completion in the phase two mono therapy.
In newly diagnosed oral pharyngeal squamous cell carcinoma patients with 19 of 20.
Anticipated patient dose and patient follow up ongoing.
Based on our encouraging data thus far.
<unk> 2009, immunotherapy has broad potential to address the estimated 5% of all cancers, which are attributed to HPV associated malignancies, including cell recall had a neck and anal cancers.
Let's now turn to our ultra car T trials.
We completed enrollment for <unk> 3006 in the phase one dose escalation cohorts of the phase <unk> study in relapsed refractory AML patients.
Dr. David Solomon of Moffitt Cancer Center, and the lead investigator for the <unk> 3006. This study will present phase one safety and efficacy data at Ash on December 12, 2022.
We are encouraged by the results to date and are looking forward to the presentation in patients with relapsed refractory AML, which represents a potentially significant benefit to this patient population.
The phase <unk> study of <unk> 3006, Ultra car T has been expanded to Mayo clinic in Rochester, Minnesota.
The first of several new sites expected as part of the multi center expansion of this study.
And the first patient was successfully dosed.
These expansion site.
Additionally, as previously announced we received FDA clearance to incorporate repeat dosing in the expansion phase of this study.
This is an important milestone for presaging AD rollout for the field of immune therapies as they demonstrate the proof of concept for our scale out of overnight decentralized ultra car T manufacturing using ultra operator.
Site activation is in progress at several additional major cancer centers across the U S.
Ultra operator is a game changer for the field and we are pleased that the renowned institutions such as the Mayo clinic are partnering with us to advance its development.
<unk> 3006 has been granted orphan drug designation as well as fast track designation for patients with relapsed refractory AML.
Now for <unk> five.
Our ultra car T treatment for advanced ovarian cancer.
Enrollment is complete in the phase one dose escalation cohorts of the intra paired with Tonio, an intravenous arms without lymphoid depletion as well as in the lymphoid depletion cohort in the IV or.
Patient follow up is ongoing and we expect phase one data to be presented in the first half of 2023.
You may recall that during our second quarter of 2022 call, we announced FDA clearance to incorporate repeat dosing in this study.
And we are pleased to report that the first patient has received a repeat dose via IV infusion.
Enrollment is ongoing in the phase <unk> expansion at dose level, three with lymphoid depletion priors to IV infusion.
Site activation is in progress at multiple major cancer centers in the U S. Yet another point of validation for the scale out of our overnight decentralized ultra car T manufacturing using ultra operator.
This is an extremely important to study.
There have been many more therapeutic advances in this patient population with 10% or less response rates in ovarian cancer with current treatments.
I participated in a panel at <unk> earlier this week with some of the prominent figures in the cell and gene therapy, including the car T space and.
And it is clear that there.
Remains significant unmet need and opportunity for innovation in solid tumors.
We believe with our ultra car T platform, we have a unique solution to address these limitations.
Finally, our ultra car T trial in PR Gen III <unk> seven.
Which is being evaluated in the treatment of advanced <unk> positive hematological and solid tumors.
<unk> 3007 users are next generation Ultra car T technology and incorporate intrinsic PD one downregulation. In addition to the three effector genes at cost membrane bound IL 15, and a kill switch.
Intrinsic blockade of PD, one expression is aimed at addressing the inhibitory tumor microenvironment and eliminating the need for the checkpoint inhibitor combination.
The phase one <unk> umbrella study in Hematological and solid tumor is on track to initiate dosing this quarter.
We look forward to an investigator led trial in progress presentation of PR Gen III seven at Ash on December 11, 2022.
I will now turn the call over to Harry who will review, our third quarter 2022 financial highlights highly.
Kylie Thanks.
Thanks, Alan and good afternoon to all of you on the call.
I'd like to start by highlighting the great progress, we've made over the past quarter and strengthening our balance sheet is.
As previously announced during the third quarter, we completed the sale of our wholly owned subsidiary of Trans Ova genetics for $170 million. The proceeds from this sale have provided us the ability to retire our convertible notes.
In regards to those convertible notes during the third quarter and through today, we have executed opportunistic open market repurchases retiring $144 million of our outstanding convertible notes that are due July 2023, bringing our outstanding debt.
As of today to $56 million.
The volume weighted average price of the repurchase activity was approximately 98%.
4% of par.
Taking into consideration the discount to par and the savings on future interest through the stated maturity date, we will realize a cash savings of over $5 $4 million.
I'd also like to spend some time highlighting certain aspects of our operating results for the third quarter and year to date as.
As a reminder, trans Ova as historical results are reported as discontinued operations as was the case beginning with the second quarter.
As I've stated on previous quarterly update calls we have pursued a variety of cost reduction initiatives over the past couple of years, specifically as it relates to our SG&A costs. These initiatives have borne fruit.
As you can see in our financial statements.
Comparing SG&A expenses quarter to quarter and year to date to the prior year to date those costs have decreased 8% to 9% respectively.
Based on these reductions in our overhead costs. We are now able to focus on the continued advancement of our programs and the potential future commercialization of such programs.
As for non operating expenses with the retirement of our convertible notes cash interest expense was lower for the three and nine months ended September 32022 versus the prior year periods.
Looking at the remainder of this year and into next year cash interest expense will be significantly lower in the fourth quarter of this year and the first half of next year through the maturity of our remaining notes.
With the sale of Trans Ova and the retirement of debt our balance sheet is much stronger than it was earlier this year.
We ended the third quarter with cash cash equivalents short term investments and restricted cash of $153 $8 million.
This provides us with a cash runway into the early part of the fourth quarter of 2023.
Overall, we have been successful in implementing our strategies to date and we look forward to continued success in moving our product candidates through the clinic.
That concludes our prepared remarks for today.
We're now happy to take your questions.
Operator.
Yes.
We will now begin the question and answer session. As a reminder to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
As a reminder, please limit your questions to a total of two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Jason Butler with JMP Securities.
Hi, Thanks for taking my questions and congrats on the progress.
Two from me first of all on 2012 can you just.
Give us any color on the patients enrolled into the phase II trial in terms of their baseline characteristics and specifically baseline.
Surgeries and then secondly for three five any more color you can give us on the patient that was re treated.
What is the procedure successful in.
Anything you can say about safety so far thanks, sure Hi, Jay.
Well in regards to the <unk> 2012.
The patient population that actually.
We have been treating is that patients with the most severe cases, they have at least three surgeries and more but majority of them are much more than that and some of them have been continuously almost on a monthly every four to six weeks requiring surgeries.
So we did not go after a very very.
Early on disease, but the actually the patient population that we have in our trial is the most difficult if someone wants to say it that way to treat.
And.
From the perspective of.
What we will be reporting in the upcoming is on the obviously the safety both on those.
Those escalation, but also an expansion.
Cohort, which as I mentioned contains the patients that I discussed.
And we will love we are very excited about the data that will shown as was mentioned there is really no treatment for these patients except consecutive surgeries.
Some of them they have hundreds and hundreds of surgery.
Throughout their life and as you can imagine this is a very very difficult disease to treat and up to this point there has been absolutely no.
Treatment.
Surgery is just a matter of removing followed by reoccurring continuously and this is what these patients have to look forward to it.
In regard to our PR Gen. Three five that I've mentioned, we have re dose the patient IV infusion.
And the patient is doing very well and we are really excited and this patient actually had received the first dose.
While back as well as and had been doing well very well and it continues and after the second dose. So we are very excited for that.
Reports and coming in the first half of next year and as I mentioned actually.
In prepared remarks, I just came back from.
The meeting at the Sip the actually it was a special panel for the cell and gene therapy.
With some of the renowned people in Israel and it was very clearly mentioned that really the field has nothing for the solid tumors at this point and how the current.
Including the car Ts are not.
April to address anything in the solid tumors and a discussion around our overnight.
Basically manufacturing and the ability of the sustainability of these cells that are not exhausted and going into the solid tumors such as ovarian. So it is a very exciting time for us.
With the especially the solid tumor indication and we look forward to the presentation next year.
Thanks, Alan I appreciate all the details.
The next question comes from Ben Burnett with Stifel.
Okay. Thank you very much.
Wanted to ask a question about the AML Ultra car T program.
Can you just talk about what went into your decision to focus on dose level three and I think there were some maybe some discussion in the ash abstract around.
Around expansion and expansion kinetics.
But what would a decision.
So just level III and was it efficacy and I guess also maybe just a clarification can you remind me for the AML program.
Well the.
For patients to get multiple doses will the product be made all at once and it's split into two doses will it be two separate manufacturing runs.
Great. Thanks.
First of all for them.
Peer Gen three six and decision on dose level three.
But.
<unk> really based on <unk>.
First of all the efficacy that we reported if you recall.
The ash last year, we already buy at the dose level, one and two.
We already had shown.
Objective responses, 50% objective responses.
And we are talking about dose levels that were between.
Basically 100000 to a million.
100 to 300000.
<unk> 30 to a 100000 per kilogram, so very low doses. The maximum dose that we have infused was around $28 million so because of that.
The ability of this platform.
Is that these cells are not exhausted and they don't require activation outside.
We believe that we do not need to.
Hundreds of millions and billions of these cells, which is also leads to the very severe crs and some of the toxicity.
Neurotoxicity that hasn't been seen with other type of cell therapy, especially the car Ts.
For that reason.
Based on both safety and efficacy.
We decided that the third dose and the ability to re dose would be sufficient for us to stop.
As our third dose level and then.
Expand and go after the efficacy because as U S steel with a very encouraging data.
From dose escalation, we are still in a phase one and the efficacy data has to include a larger number of.
The patient.
And we believe that we have a very good position, especially with the fast track.
As a nation that we have as well as the orphan drug but.
Positioning this therapy rapidly in a larger patient population and looking at the clinical data, especially the efficacy both safety and efficacy and that was the.
Main reasoning for going after that.
We also had shown that of course incorporation of lymphoid depletion had led to the much faster expansion of these cells and we showed that kinetic of expansion of these cells in the ash last year and that also was another reason that we believe.
Therefore, our.
Does the third dose level was sufficient.
To go through an expansion. So we are really looking forward and now with the Mayo clinic.
Having come onboard a number of others.
Major clinical centers that will be joining us in the next few months.
We are looking at recruiting patients as rapidly and what is really for the first time.
I cannot stress this enough.
This is the first time in the field.
That you have been able to do a decentralized manufacturing and various site be able to manufacture these ultra cars overnight.
This is not one site anymore. This is now the number of sites.
And obviously it is really exciting because we have shifted the paradigm here.
For the first time in this and allowing us the re dosing.
You asked about <unk> 3006 at.
That is a split dose so currently.
Obviously, there are a number of ways that you can do this you can freeze back.
T cell.
<unk>.
Blizzard and dose at the time that you want.
And we have been working also on the process that you can generate your ultra cost at once and then move toward that so those.
Process development work is ongoing but at the current we are able to basically provide number of doses, which is again.
Unique and paradigm shifting why because the other companies the concept of re dosing at the 400 $500000 per shot is almost impossibility as far as the cost is concerned and for US the cost of this is lot different.
And I think this is what it makes these platform unique.
The ability for the patient not only to receive their treatment, but to receive it multiple times at different points, if they need it.
Okay excellent that's super helpful.
And if I could just ask one more just on the <unk>, one 3007 Ultra car T program.
What's gating to initiating patient dosing for that.
So I'm going to be very Frank and open. It has been a lot of the changes that has happened in moffitt and internal.
Processes that they have for their various committees.
Our drug product is a data and.
Basically our investigators are now ready their manufacturing is set and is just passing through the last committees and some of the.
Bureaucracy that is taking place.
Okay understood. Thanks, so much I appreciate it of course.
Again, if you do have a question. Please press Star then one.
Our next question is from Arthur he with H C Wainwright.
Hi team good.
Good afternoon.
Okay.
Alright.
So my first question is regarding the 22012.
Could you remind us.
But what the dose level for the.
The 2012.
Expansion cohort.
On average how many goes who is the patient received close to that so yes. So those level two five times tend to the 11.
And our patients received the core solve for.
Basically infusion.
Not the infusion sorry, it's the sub Q injection I.
I apologize.
That is the course of four and five times incentive BLM.
Got it thanks for that.
And.
I noticed that for the phase III study.
You tend to go up to like.
48 patients.
According to the community.
Have you speak with the FDA regarding this five study.
Would that be.
<unk>.
As a registration trial.
Excellent question and that's exactly some of the discussions that we are.
Having with the FDA in regard to the regulatory path for this molecule in view of the safety and.
Efficacy that we're seeing in our expansion cohort.
Okay.
Thanks for the color.
Mike.
My last question is for both.
<unk> 3500, 3006, the repeating repeat dosing regimens.
Just curious.
How you guys determine.
The dosing interval for the repeating builds for the patient it's more fixed schedule or.
More personalized for the patients.
A physician discretion.
Excellent question unlike off the shelf.
And because as you know the conventional cars. They received one dose and that's all day can produce Sunday received at the only ones that they are multiple dosing within the first two or three weeks is off the shelf and the reason for that is because the cells Dev as the clinical data has shown they don't.
Sustain themselves and that goes hand in hand with upwards of almost $300 million. Each times every week for three weeks and close to 1 billion cell infused with the very very heavy.
Lymphoid depletion.
Which.
Obviously has had a number of issues with the talks and and eventually if you still look at that.
How the cells maintain themselves and.
At this time.
Pretty much after a month they are gone.
So with that in view actually are re dosing as you mentioned, we don't need to do it on a weekly basis.
Because our selves.
Directly they expand and manufacturer actually inside the patient we don't do any expansion on slide these cells because they have the membrane bound IL 15.
Capable of upon seeing the tumor antigen expand and we have shown the kinetics and continue the kinetics.
Over the period of time as a follow up with this patient.
But also in the absence of antigen for instance, while they are circulating to get to this side of the.
Tumor then they can sustain themselves because again of the membrane bound IL 15 and that they have so for those reasons. We are very differentiated from what you see from.
From the off the shelf and the need in those settings.
Absolutely have to do that in.
And our savings we do not need to do this because of the mechanism of action of this ultra car T and as a result, the re dosing is at the discretion of the basically our oncologists and the need of the patient that's how it takes happen.
And again are still with us.
Tremendous difference in the number of the cells that are being infused because obviously.
In the case of off the shelf there are.
Hundreds of millions to billions.
Ours is much it's a log of a difference there.
Awesome, Thanks for the additional color.
Thank you for taking my question and congrats on all the progress.
Thank you.
The next question comes from Jennifer Kim with Cantor Fitzgerald.
Hi, Jennifer.
Hey, everyone. Thanks for taking my questions and congrats on all the progress I have a few.
Two questions here, maybe just the 2012 asset.
Given the exciting expansion data you're expected to present in early January is the timing of the R&D event.
Also coinciding with when you believe you would be able to give a greater level of color around those potential regulatory pathways.
I think.
Yes.
That's excellent question at this point I will not make any comments in regards to that question to add obviously as soon as we can we will make comments in regard to the regulatory aspects, but what I can say is we are definitely looking forward to this presentation because we are.
Really excited for this patient population in <unk> 2012.
Is currently showing both in regards to the safety and efficacy and we are pleased that.
Basically our investigators can present this data early in January .
Okay. That's fair and then I have a few questions on the 3000 and success at first in terms of the timing that it takes to get that tech transfer and site activation like all of those activities done for the decentralized manufacturing motor car T has that all been.
Been in line with your expectations in terms of how long it takes to get that done and then my second question for this asset is the repeat dosing in the phase <unk> is that still anticipated to start this year.
Well.
Yes.
Repeat first of all let me take a texture assets.
Well regionally when this platform has been.
Design and advance the whole concept was that this platform can be basically taken up on any of the cancer centers and the tech transfer.
The ease of technology has to be in such a way that any clean room in the hospitals can do this.
And.
Even though at the very beginning it was considered.
Almost a dream to achieve something like that.
We are so 12 that.
Two and a half years post starting these trials.
Phase one not only we have shown the capability of this ultra cost to actually to manufacturers, but also in the patients to be connected flea expanding it and show the.
Preliminary signs of efficacy that now in regards to the tech transfers.
Yes, I have to say the answer is what we anticipated and as Sop that.
We had provided to the center is self sufficient.
Our teams are not at the sites to actually execute.
Any factoring of diesel.
So the staff of the clean room in the hospital. They do this and through the Sop is that we have developed and the tech transfers that we do and that is not a lengthy time, we are not talking about.
Months or six months of training, we're talking about.
During the Covid I can tell you when every manufacturing sites were shut down.
We continued with our tech transfers and actually we did that overdue. So this is the advantage of this platform and also the incorporation of ultra operator, which makes the semi closed system, which is that central part of this technology.
Has allowed this.
Basically sites to move very rapidly and we're really pleased.
We have now.
Number of sites that are coming up both for our Hematological trials in three six and 3005 and you will see that in the next few months as they rollout and as Scott actually enrolling patients.
Okay, and then if I could squeeze in one more question and for the six.
Specifically at the dose level three.
Those patients what kind of updated data and I guess, how meaningful can that can we expect that updated data to be in the ash presentation beyond what was revealed in the abstract.
I think what you will see is complete.
Complete all of the doses, both in that with and without <unk> depletion I think some of the most.
Not only the safety of everyone and having no.
Basic to the toxicity, but also the efficacy that is.
Being.
<unk> in this patient population as you know this is a patient population that has two to three months to leave they have failed multiple treatment before these are all this stage fourth half.
Sales.
Minimum of three to four if not five or six and they have also all sales bone marrow transplant at some point.
So they really have no option in front of them.
And to see objective responses in this patient population.
Extremely important and I think we will be reporting on those and also the science of haul some of that.
The ultra cars.
Working directly in the patient so quite exciting part for us.
Okay, Great. That's really helpful. Thanks, guys and congrats on the quarter.
Thank you very much.
At this time, we're showing no further questioners in the queue and this concludes our question and answer session I would now like to turn the conference back over to doctors sub severity for any closing remarks.
Thank you operator.
You can see we have made substantial progress across our clinical pipeline and corporate goals.
Sure.
We continue to focus on fiscal discipline and maximizing our balance sheet to drive our lead clinical programs through the clinic and towards commercialization.
Retiring a substantial portion of our debt reduces overhang and adds additional operating capital $2 balance sheet.
On the clinical side, we are.
Eagerly anticipating releasing the complete phase one dose escalation and expansion data from our <unk> 2012 trial in early January .
We are also looking for what the.
Two the two upcoming presentations for our ultra car T programs at Ash in December .
As always we are deeply appreciative of the support from our shareholders. We continue to strive towards creating a shareholder value and focus on bringing in treatments to the market with differentiating prices to address the high unmet medical needs.
Thank you.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
Yeah.
[music].