Alaunos Therapeutics Inc. Q1 2023 Earnings Call
Good day and thank you for standing by welcome to the Atlantis Therapeutics first quarter 2023 conference call. At this time, all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
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Please be advised that today's conference call is being recorded I would now like to hand, the conference over to your speaker today, Alex Lobo. Please go ahead.
Good morning.
Earlier this morning allow us issued a press release announcing financial results for the three months ended March 31 2023.
We encourage everyone to read today's press release as well as the a lot of <unk> quarterly report on Form 10-Q for the quarter ended March 31st 2023, which was filed this morning with the SEC.
The company's press release and quarterly report will also be available on the a lot of web site at a lot of dot com.
Okay.
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 provisions of the private Securities Litigation Reform Act of 1995.
Participants are cautioned that this conference call contains time sensitive information that is accurate only as of the date of this live broadcast may 10th 2023.
Actual results could differ materially from those stated or implied by forward looking statements made.
Today due to risks and uncertainties associated with the company's 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 maybe required by applicable securities laws.
With me today are Kevin Boyle, Senior Chief Executive Officer Drew Doniger, Vice President of research and development and Mike <unk>.
Vice President of finance.
As robust Gaba Vice President of technical operations will also be available for the Q&A session.
With that said I would like to turn the call over to Kevin Kevin You May go ahead.
Thank you Alex good morning, everyone and thank you for joining us.
The disruptive technology of Llanos is delivering to patients has the potential to transform the casher cancer treatment paradigm.
We believe that our innovative approach targeting high frequency driver mutations is the most promising therapy for solid tumors.
We're encouraged by the fact that our first patients treated had a meaningful clinical response and established for the first time that non viral TCR T cells can bring hope to patients with high unmet clinical need.
And we are not alone in our excitement.
Our accelerated enrollment compared to the prior year highlights the enthusiasm shared by the prospective patients.
The <unk> team is off to a productive start in 2023 as we progressed towards the important clinical milestones.
We have worked diligently to advance our TCR T Library phase one two trial and have accelerated enrollment with a manufacturing suite that is busier than ever.
Since our last update we have implemented multiple enhancements to our screening enrollment and manufacturing protocols that we added through an A&D amendment at the end of 2022.
We aim to build on the encouraging early clinical data we have generated to date and expect to report interim results in the third quarter, including new data from multiple patients.
In addition to the clinical progress made we've also taken important steps to strengthen our balance sheet.
The full prepayment of our loan with Silicon Valley Bank enables us to move forward unencumbered by debt.
Our recently amended agreement with prestige and eliminates royalty and milestone obligations to prestigious.
Altogether, we believe that we are taking the right financial and corporate steps as we work towards becoming a phase II ready company by the end of 2023.
I'd like to discuss our TCR T Library phase one two trial in more detail.
We have worked to capitalize on the growing excitement and momentum around this trial.
As you will recall this is a basket trial targeting driver mutations across six solid tumor indications.
Non small cell lung colon, endometrium, pancreas, ovary and bile duct cancers.
We are actively enrolling patients at MD Anderson with any one of these six cancers based on matching both a specific mutation and HLA combination to a TCR that is available in our library.
Okay.
During the first quarter, we worked to operationalize the critical enhancements to our screening enrollment and manufacturing processes that were included in this expansive fourth quarter 2022.
These improvements have facilitated faster patient accrual.
We have also implemented cryo preservation to our manufacturing process, increasing flexibility for patient scheduling and treatment.
Since adopting cryo preservation, we have manufactured multiple patient products with viability purity and TCR positivity comparable to our prior process.
We believe that these enhancements will enable us to meet our program milestones this year.
Additionally, our investigators at MD Anderson had been staunch supporters of this trial identifying promising patients and generating a fully booked manufacturing schedule through the coming months.
Looking ahead early translational data from our first three patients treated will be highlighted in a poster at the 2023 <unk> annual meeting taking place in early June .
In total this year, we anticipate treating between nine and 12 patients.
<unk> the phase one portion of the study.
As we progress towards this important milestone will provide a more fulsome readout with new clinical data on multiple patients in the third quarter.
We are singularly focused on advancing our TCR platform targeting solid tumors.
Recent corporate and capital changes have supported our belief in the tremendous upside potential of this platform.
In April we were pleased to amend our license agreement with <unk>.
This amendment maintains our exclusive rights to use sleeping beauty TCR.
<unk> targeting neo antigens, including driver mutations.
At the same time, the amendment eliminates all commercial sales based royalties and milestone obligations due to presage them.
This represents a potential savings of over $160 million.
In return presaging regained the rights to our noncore car T and IL 12 assets.
As a lot of US is one of the most advanced TCR T companies targeting driver mutations, we believe that unencumbered our TCR T assets allows us to maximize the shareholder value and further facilitate partnering discussions.
There had been several partnering transactions announced recently in our space and we believe this is a positive sign for TCR companies.
I would also like to highlight that earlier this month, we fully prepaid the remaining balance owed under our term loan with Silicon Valley Bank.
This prepayment also allowed us to upgrade the quality of our depository bank to further protect our cash.
The decisive actions with regards to our SBB loan and prestige and licenses allow us to move forward unencumbered by these obligations.
Also on the corporate side, we are excited to welcome Robert Hofmeister to our board of directors.
For those of you who don't know Robert He is an expert in the discovery and development of engineered TCR therapies and brings a wealth of experience in cancer immunology.
We are thrilled to have him on the Atlanta team, Andrew and I'll be have already been leveraging his insights and expertise.
In addition to the exciting progress we've made in the clinic and enhancements to our corporate structure, we're making significant progress towards expanding our industry, leading library of Tcr's through the Hunter platform.
I would like to now turn the call over to drew to highlight these ongoing R&D efforts through.
Thank you Kevin good morning, everyone.
I'm excited to share with you an update on the continued progress of our R&D efforts, including Hunter.
As a reminder, hunter is our cutting edge proprietary TCR discovery platform and is the foundation of our two pronged library expansion strategy to increase the addressable market for our therapeutic drug candidates.
One way we are expanding the library is by adding TCR is targeting more HLA is combined with our current K Ras <unk> 53 in Egfr mutations.
Another way is adding more tcr's targeting new mutations within these critical gene families.
Through this strategy, we believe we can bolster our IP portfolio.
Strengthen our pipeline for Nexgen TCR T.
And potentially deliver effective treatments to a larger number of patients.
We have already shown twice that we have the manufacturing and regulatory structure to expand our clinical library.
When we added the two additional tcr's to the library last year, we brought the total number of Tcr's to 12.
Our screening match rate has grown to over 10% as a result, and effectively doubled the potential addressable market.
This year, we expect to grow the library to 15 total tcr's as part of our strategy to expand the number of patients that could potentially benefit from our TCR T cell therapy.
We recently expanded the infrastructure for our Hunter platform to increase throughput of TCR discovery.
We have introduced new bioinformatics capabilities, and advanced lab equipment, which greatly increases screening rates, while maintaining our high TCR discovery success rate.
Dozens of tumor samples have already been process, and we anticipate ramping up our screening pace in the second quarter.
From each tumor sample, we can line up thousands of the individual T cells and sequence them simultaneously as.
Single cells.
Unable to make the TCR and identify which ones are reactive to a specific mutation in HLA combination.
Once the TCR is identified as a valuable addition to our clinical library, we can amend our I N D to incorporate the new TCR.
We think we can do this in nine to 12 months, which we believe is markedly faster than competing platforms.
We are proud of Hunter and believe it offers significant advantages over traditional TCR discovery methods.
We believe our rapid and high throughput approach to generate proprietary tcr's potentially increases the value of the company's pipe pipeline.
These tcr's may be use and the exploration of next generation TCR T cell therapies, including membrane bound IL 15, and multiplex TCR T.
Which aimed to further deepen clinical responses.
Okay.
We also believe hunter has the potential to generate out licensing or.
Partnering opportunities that could result in non dilutive capital.
I am so proud of the team who has more than doubled the screening pace over the past year and strongly believe that we will be successful and identifying valuable tcr's for autos.
I would now like to turn the call over to Mike for a financial update Mike.
Thank you Gerry as an organization, we remain intentional with our capital.
With a team of less than 35 people, we continue to make valuable investments to fulfill our commitments to patients and to create value for our shareholders.
We are confident based on recent conversations that our science will continue to be recognized by investors for what it is.
Unique and disruptive technology that has promised to be curative for solid tumors.
Now allow me to review our financials for the three months ended March 31 2023.
For the first quarter of 2023, we reported a net loss of approximately $10 million or.
<unk> net loss per share.
Compared to a net loss of approximately $9 8 million or.
<unk> net loss per share for the same period in 2022.
As we look into the numbers in a bit more detail research and development expenses were approximately six $5 million for the first quarter of 2023.
Compared to approximately $5 6 million for the same period in 2022.
An increase of 17%, which is primarily due to increased manufacturing and TCR discovery activities.
General and administrative expenses were approximately $3 $2 million for the first quarter of 2023.
Compared to approximately $3 5 million for the same period in the prior year.
Decrease of 10%, which is primarily due to lower professional fees as we continue to be focused on being good stewards of capital.
As of March 31, 2023, <unk> had approximately $37 4 million and total cash balances.
Our operating cash burn for the first quarter of 2023 was approximately $9 $4 million.
<unk> to approximately $7 8 million in the same period in 2022 and.
An increase of approximately one 6 million.
This amount was in line with our expectations as it reflects the increase in our manufacturing activities, resulting.
The resulting from the active enrollment of patients in our TCR T Library phase one two trial.
Okay.
Based on our current operating plans, we continue to expect our operating cash outflows for 2023, excluding debt service costs to be between approximately $35 million to $40 million.
As a result, we expect to have sufficient cash resources into the fourth quarter of 2023 to fund operations and R&D programs.
As Kevin noted earlier at the beginning of this month.
Later, he paid the remaining amounts owed under our term loan with Silicon Valley Bank.
Which was $11 million as of March 31st 2023.
We are pleased to report that with no remaining obligations to SVP.
<unk> cash balance of $13 9 million as of March 31, 2023 has also been fully released back to us.
This allows us to have complete operational control over our cash.
And eliminates additional interest expense.
I'd like to leave you with a biotech capital markets update.
Investor engagement remains encouraging and evidence points to capital markets being a part of transactions are companies with differentiated science.
Despite the disruption following regional bank failures. The follow on market continues to outpace this point last year.
Seven $3 billion has been raised by our 60 follow ons year to date.
Compared to <unk> $6 billion raised in 44 follow ons at this point in 2022.
We believe this is a positive sign for biotechs, which is also aligned with the interest we have received from prospective investors.
I would now like to turn the call to Kevin for closing remarks.
Thank you Mike.
Enrollment has been brisk and manufacturing suite has been occupied.
We've told our hard working employees buckle your seatbelt low end tied around your waist and be prepared for an exciting ride things are getting busy around here.
I am proud to say that we have manufactured multiple products at the same time and our team is committed to producing therapies for patients in need.
The translational data is most encouraging and we will share an update at <unk>, including safety persistence and efficacy data.
We look forward to providing an interim trial readout in the third quarter highlighting additional patients treated.
We are also enjoying success identifying new Tc hours in our Hunter program.
We will strive to strengthen our IP position.
Generate partnering opportunities and increase the addressable market with this platform.
The building momentum and interest in our TCR T platform gives us great confidence in the potential value of our disruptive technology as we seek to revolutionize the treatment of solid tumors.
I'd like to thank all of my colleagues at <unk> as well as our patients shareholders and partners for their continued support as we weaponized the immune system with powerful tcr's to treat solid tumors.
We will now open the call to questions Corey.
At this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Our first question comes from per car at well at Cantor Fitzgerald per caller. Your line is open.
Hi, good morning, everyone and thanks for taking my questions. So first question is for the update on <unk>. It seems that there is translational data getting presented corporation three as well.
We have not seen any efficacy so could you confirm if you've got any efficacy data for question number three if not what translation data would you be presenting and why only transmission data for that patient and I had a couple of follow ups. Please.
So we're limited in part per car by what we can say since the full abstract has not been released with <unk>, but the poster will as you say include data on patients.
One two and three that we've previously disclosed that we've treated.
The embargo will lift in the full abstract will come out on May 25th I believe in the in the afternoon.
But before that time. Unfortunately, we are not able to disclose any further detail on the data being presented.
What I can say is we believe that.
The data that we're presenting is just the start and we look forward to providing a more.
Wholesale and third quarter of this year as promised with additional patients.
Got it. Thank you Kevin and second question, if I heard correctly nine to 12 patients are expected to be dosed by end of the year to complete phase, one which seems lower than the 12 to 15 patient target.
Noted previously so maybe first if you could confirm whether there has been change in the target enrollment for <unk> one.
Any reason for this change and where do you have enough patients at each dose to make a call on the recommended phase two dose.
Yes, thanks for the question.
Just simple math, adding the three patients that we treated last year. The nine to 12 range and if you add three patients that were already treated in 2022 gets you to the same guidance that we provided previously 12 to 15 patients. So our guidance has not changed and we're really quite.
Quite encouraged by how engaged our pie as have been.
Literally fighting over manufacturing slots that we have to get their patients enrolled in this trial. So very excited about the momentum that we have and look forward to providing further updates.
Got it thanks for the clarification, Kevin and last question for me cash guidance until four Q and you have the interim update in Q3.
Timing of the interim data is quite close to the cash runway guidance. So there's a lot of stick a lot at stake for this interim update you have more visibility than us. How confident you are you are those interim update will be meaningfully positive to finance the company.
Could you explore other financing avenues before the internet. Thank you.
Mike do you want to take that sure thanks per car.
Yes, we believe our cash runway over the.
The next data readout in our library phase one two trial.
<unk> is obviously, an important inflection clients for allowing us.
And from a fundraising perspective.
To be good stewards of capital as mentioned earlier.
And we remain sensitive to dilution with that said, we remain opportunistic and consider all options available to us.
Thank you.
Thank you very much standby for our next question.
Our next question comes from Thomas Flaten of Lake Street Capital markets. Thomas Your line is open.
Good morning, guys I appreciate you taking the questions.
I'm curious.
The interim readout in Q3.
Is it is it reasonable to assume that we'll see patients that have been dosed at the third dose level as well or will they be from the second dose level only.
Our Thomas we would steal the Thunder. If we gave you any more insights about what we would release with regards to the third quarter I will say.
Just as a reminder, the trial design is quite flexible with regards to how many patients get dosed at each level, we're going to be guided overall by conversations with our pis with regards to dose levels and what they believe is the appropriate number of cells with regards to treating those patients what I can.
Can reiterate is that there will be multiple patients that we will be speaking to when we provide a clinical update in the third quarter and are very excited to provide an update to our investors prospective investors and research analysts.
Got it and will that be done in the context of a scientific meeting or just something that you can do on a standalone basis.
Going to keep all options open and be flexible in that regard I think it's important.
Just had the flexibility at this point, what we do want to commit to US just as we had guided earlier honing in on that guidance to say it'll be in the third quarter. So.
We'll look forward to connecting with everybody then and I think everybody will be.
Excited as we are we hope to hear an update on the trial.
And switching gears a little bit.
Maybe a year ago, we were talking about having capacity for one patient per month kind of was.
Was the maximum maybe you guys have done a great job in expanding your manufacturing capacity, but I was wondering if you could contextualize for US as you go as you move into phase II next year, what that manufacturing capacity needs to be and over what time period. Do you guys think you can get get there with current resources and planned resources for that matter.
Sure why don't I pass it over to Avi since he's in charge of manufacturing here. Thanks, so much for that question.
We're very excited about our manufacturing platform.
We mentioned last time, we have expanded our manufacturing capacity, but phase, one which is 2% tyron.
That really has the wildcard pretty valid, especially after introduction of the car ratio.
Our program, which is well received by RPI.
Which which has really helped us out putting on.
Our schedule upfront into the calendar. So we are busier than everybody now manufacturing suite.
As far as.
Increasing the capacity for the phase two we are investing in our multi pronged manufacturing strategy.
We are going to be we have multiple options.
Our side, where we can expand our manufacturing capacity in multiple different where either in house are going to be the <unk>. The combination of hybrid approach, we're going to be utilizing those as time comps and whatever it is in the best interest of the company.
As well as the shareholders. So we are very excited about it and we're looking forward to going into the phase two and making more patient cells.
Excellent I appreciate you guys, taking my questions. Thank you.
Thanks, Thomas Thank you very much please standby for our next question.
Our next question comes from swam Pakula Ram <unk> H C. W. Your line is open.
Thank you this is RK from H C Wainwright.
Good morning, Kevin.
So.
In the.
In the third quarter Youre expecting to put some additional data out there.
On the current study.
Okay.
How many patients do you think you can get get to by that time, because obviously are making multiple changes not only on the manufacturing side, but also on.
On the trial itself you said you did some amendments.
Two questions one is like what kind of amendments helped increase.
Enrollment rate.
Two.
Okay.
Talking more like 78 patients or almost getting to the end of the trial.
Later, we will have there.
I'm, just trying to get a feel for things.
Absolutely RK. Thanks, so much and it was great seeing you last week.
So the IND amendment in the fourth quarter of 2022 was really <unk>.
Excellent.
We took our learnings from the clinical trial in 2022, and just adapted and so in the fourth quarter. The updates included a combination of things one as we combined what we had a separate protocols under treatment and screening combining that's one and that really made the entire enrollment process a lot <unk>.
Year, both for patients and for physicians. So I think it was well received by our Pi is also well received.
Patients who are interested in this study.
One into the details a little bit more as we no longer had a requirement for re testing of the tumor mutation.
Previously we had.
Required a re test of the mutation if we had more than six months between the last test what we learned and what we've shared previously is in our early learnings post treatment biopsies, we've been able to confirm that the mutation has remained present and so we felt quite comfortable that since these driver mutations are at.
The core of cancer that that mutation is going to remain and so we eliminated that re testing aspect and that also really facilitated and eliminated a prior hurdle. So again, taking our learnings.
The other thing that we did is added cryopreservation and let me tell you that just has made the predictability great. We talked about the ability of getting the patient cells earlier in their cancer journey.
And that's allowed us to manufacture products in a very efficient way freeze down the products and have that ready for the patients.
If unfortunately other treatments fail them and they are ready for our treatment and so those are the learnings. That's the amendment, that's really facilitated enrollment.
And it's really kind of buoy to us and exciting and I applaud all of you analysts were trying to figure out more detail of how many patients are treated today.
A plus for try and I'm going to do my best though early in the morning to not answer that and leave you wanting more at the update in the third quarter. If that's all right.
I wish you had one less cup of coffee this morning, Kevin I've been helpful.
So talking to do.
A question for Joe.
On the on the Hunter platform.
Yeah.
It's great to hear that you can expand.
The platform to earn to produce additional TCR.
So.
In terms of trying to generate.
Non diluted funding through partnerships what sort of.
What sort of targets.
Are you looking at or can you give us any additional color as to.
How we are able to attract some partnerships.
So protracted.
Additional partnerships.
Okay.
Yes, good morning RK. Thank you for the question. We are so proud of our Hunter platform and we have very high success rate of TCR discovery. So we believe that as we explore partnership opportunities though.
That would be attractive potential partner, we're able to look at multiple different targa.
Targets at the same time, we're really focused on K Ras P 53, and Egfr as part of our library expansion strategy. We could go after other targets as needed.
It's important to note that the TCR is that we do discover exclusively owned by Olano Senator proprietary so we could use those for TCR T or for other treatment modalities and so we're quite excited.
Excited about that part of the Hunter platform as well.
It's nice to see.
Avid as drew is able and his team is identifying not just these driver mutations but has the ability to identify many other assets that could be valuable for partnering and that sort of robust flexibility and power of discovery.
And I think you also heard drew highlight the fact that.
There has been some recent implementations over there increasing the throughput. So the you can think about it two ways. They can either be discovering more things more quickly and processing more samples or youre getting more efficiency out of all the people that are on the team with the adoption of some AI tools and some adoption.
Of new equipment, and new processes. So the bioinformatics team is it's amazing how they've harnessed the power of AI to really accelerate the throughput over there.
Thank you one last question from me on <unk>.
Onto cash.
So.
I did see.
The release of the restricted cash that $13 $9 million is that included into the into the $37 $4 million that you were talking about.
That is this.
In addition to that some flexible.
Hi, RK. Thanks, Thanks for that question.
13, 9 million of restricted cash is included in that 37 5 million of total cash balances that we had as of March 31 2023.
And as mentioned earlier.
Our cash runway is expected to extend into the fourth quarter of 2023, which is in line with previous guidance.
Perfect perfect. Thank you. Thank you for taking all my questions gentlemen.
Always a pleasure thanks.
Thank you. We appreciate your participation in today's conference. This does conclude the program and you may now disconnect.
Okay.
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