Q2 2023 Gamida Cell Ltd Earnings Call

Speaker 2: My name is Michelle and I'll be your operator for today's call. Please be advised that this call is being reported at Camille DeSelves request. And now I would like to introduce your host for today's call. Mike Kuzkowski of Camille DeSelves corporate communications. Mike, please go ahead. Thank you and good morning everyone. Welcome to today's call during which we will provide an update on the company and review our financial results for the second quarter of 2023.

Speaker 3: Earlier this morning we issued a press release summarizing our financial results and providing a business update, which is available on our website at WWW Dec. Officer, Michelle Corfen, Chief Operating Officer and Chief Commercial Officer, Ronate Simental, Chief Medical Officer and Chief Scientific Officer, and Terry Quilio, our Chief Financial Officer.

Before we begin, I want to remind everyone that during this call, we may make forward-looking statements about our future expectations and plans, including with respect to the product and product candidates, the potentially life-saving or curative therapeutic and commercial potential of Gometasil's product, Omasurge, expectations regarding the commercial launch of Omasurge and its potential to capture market share.

The insights we're consistent that the market share capture for almost <unk> could come from transplant centers using almost search instead of other donor sources as well as transplant, there's using almost search for those approximately 1700 patients who are eligible for transplant each year and.

Could not find an appropriate donor.

Although we previously estimated this number to be about 1200, we now have independent data that show. It is more likely about 1700 patients each year, who cannot find an appropriate telenor.

As a reminder, a patient with a hematologic malignancy goes to transplants since that may be their only potential remaining treatment option.

For those approximately 1700 patients who could not find a donor they will most likely succumb to their disease.

We are passionate about.

About making sure transplant centers have access to almost surge as a potential option for their patients.

Today and in the past few months since approval, we've seen very strong interest in almost search from transplant centers, including centers that were not part of the phase III trial.

As of this morning, 12 transplant centers have been on boarded including centers, such as Duke University Medical Center Jefferson Health in Philadelphia, The Ohio State and UCLA health and.

In eight additional transplant centers are actively in the onboarding process.

We are engaged with virtually all of the top 70 centers, which conduct about 80% of the transplants in the U S.

I am very excited to say that the beta cell remains on track to possibly exceed our goal of Onboarding 10 to 15 transplant centers by the end of 2023 and that we have exceeded our expectations with regard to the number of sensors onboard it to date.

Our transplant center Onboarding team works closely with transplant center personnel on the clinical training and administrative policies and procedures required to begin using almost search as a donor source.

How quickly a transplant centers onboard it is determined by the needs of each individual transplant center.

This can include factors like staff availability to participate in the Onboarding and the status of patients currently under evaluation, who may be good candidates from search.

Our team is nimble and customizes onboarding timelines to meet individual transplant centers and patient needs.

The clinical approach and policies and procedures needed for <unk> are consistent with other donor sources and are therefore very familiar to transplant center personnel.

So ultimately the onboarding process can be completed very quickly typically more quickly than for other cell therapies.

We have also been focused on ensuring payer coverage for almost search we have confirmed coverage for the vast majority of patients in the U S.

In fact more than 85% of commercial lives have confirmed coverage. This includes national coverage with nine out of the top 10 payers and we are in ongoing discussions with additional commercial payers to further expand coverage.

Last year, we secured our almost search specific ICD 10 codes and in June we announced that we now also have confirmed CMS coverage and reimbursement for patients covered by Medicare.

We also have all the required documentation in place for patients who are covered under Medicaid The department of defense and the department of veteran Affairs.

We know from our clinical trials and working in transplant is that it takes time to evaluate patients and get them ready for transplant.

This is true for all doing our sources and the specific timeline and approach for preparing our patients for transplant can vary by transplant center based on each center's policies and procedures.

I am excited to share that patients are enrolled in the <unk> program, which was created to ensure health care providers and patients get access to therapy and have a personalized positive experience.

When a transplant physician enrolls a patient <unk> it signals that they intend to use almost surge as the patient's donor source.

The transplant centers enroll patients who can be the seller.

<unk> almost search and schedule their manufacturing data and can also work with <unk> to sell assist for patient assistance, including benefit verification patient support programs and co pay or co insurance assistant.

This is a significant step for the patient in terms of their journey to transplantation.

Once the almost search donor source is selected by the patients transplant or in the cord blood unit is received by can be to sell we are ready to begin manufacturing.

As a reminder, we have been successfully manufacturing clinical batches in our facilities for over a year, we have an experienced team in place and we are ready to reliably deliver almost surge within 30 days from the start of manufacturing.

To continue the rapid expansion of our commercial launch and support the demand for almost search we have plans to hire for account managers and two additional medical science liaisons, who support the current team of four regional account directors and four MSL.

We feel this was an appropriate investment to capitalize on the momentum and interest we are seeing from transplant centers.

Going back to our mission.

<unk> was built to deliver potentially curative therapies for patients with blood cancers.

<unk> is a core element in delivering on that mission based on its potential to increase access and address critical unmet needs in stem cell transplantation.

We are prioritizing every resource possible to support this launch knowing the meaningful impact on the search can potentially have on patients' lives.

The interest and enthusiasm from transplant centers are both gratifying and supportive of the prelaunch market insights.

Our team at <unk> has been working hard to meet transplant center demand and ensure that every patient in need of a stem cell transplant has access to <unk>.

With that I'd like to turn the call over to Rohit, <unk>, our chief Medical and Chief Scientific Officer Rohit.

Thank you Michelle and good morning, everyone.

Thank you for joining us today.

My team and I have been speaking with physicians across the country.

And the feedback we hear on <unk> echoes what Michel has shared.

We see a clear need for transplant options for their patients.

Eager to make on the search available at their institution.

Today I will provide a few updates on recent data for almost search and for our NK cell therapy candidate GDA 201.

First results in the prospective sub study of the Phase III <unk> trial were recently published in the journal transplantation and cellular therapy.

Our phase III study, which over 40% of patients where members of ethnic and racial minority groups demonstrated rapid neutrophil <unk> a key early marker of transplant success.

And lower rates of serious infections in patients transplanted with almost search compared to cord blood.

Using real world data from CIB MTR. We also showed the transplantation with on the search led to faster hematopoietic recovery than other donor sources.

A potential mechanism for these observations with elucidated in a sub study 37 patients from the phase III trial, which showed pumped and robust recovery of immune cells. After transplant was almost.

With up to a 70 fold advantage in median cell counts across most cell populations, including N K T and b cell.

The authors concluded that the faster recruitment and development of immune cells.

For the reduced rate of bacterial fungal and viral infections observed after transplantation with only search versus cord blood.

We continue to present and publish data that add to the scientific and clinical understanding of <unk> and provide insights to the transplant community.

I'll now turn to GDA 201, our allogeneic NK cell therapy candidate <unk>.

<unk> from adult donors and manufactured using a proprietary nicotinamide <unk> NAND technology.

We presented data at the International Society for cell and gene therapy, or IFC T 2023 annual meeting in June demonstrating the robustness of cryo preserved GDA 201.

We showed that NAND expansion of NK cells led to the expression of lymphoid Hanmi markers CD 62, ligand and decreased levels of lineage exhaustion markers CD 57, and CD 161, providing further phenotypic characterization of GDA 201.

In addition data from the investigator led study at the University of Minnesota, using the fresh formulation of GDA 201 were published in the July 19th edition of Science Translational Medicine.

The publication included preclinical clinical and translational data.

The preclinical data demonstrated that our Nam technology increased metabolic fitness energy charge and glucose flux in NK cells.

The implications of these findings are significant given recent research showing the importance of metabolic fitness and cellular therapy.

The clinical data showed a 74% overall response rate and 57% complete response rate in heavily pretreated patients with non Hodgkin lymphoma treated with GDA 201.

And translational data in biopsy specimens showed that tumor regression was associated with dense host T cell infiltration into lymph node tissue. After the April one treatment.

Adjusting the GDA 201 generated and adaptive immune response in patients.

These data provide further evidence that GDA 201, NK cells with originate from human donors and our expanded using our <unk> technology can overcome the historic limitations of NK cells as a viable therapeutic.

We are excited about these new insights on metabolic fitness cytotoxicity and engagement of the adaptive immune system. As we proceed with a phase one dose escalation study of GDA 201.

We are enrolling patients with non Hodgkin lymphoma at six U S site and.

We expect to report data in the first quarter of 2024.

I will now turn the call over to Terry Coelho, our Chief Financial Officer Terry.

Thank you Renee and good morning, everyone.

Is that you mentioned earlier I'm pleased to share that the company has strengthened its balance sheet in the second quarter.

We ended the second quarter with $54 $1 million in cash as a result of combined net proceeds of $34 $7 million from both the April equity offering and funds raised using the at the market or ATM facility in the quarter in.

In addition, the outstanding principal balance of our 2000 $20 million to $25 million convertible term loan was $10 million as of June 32023, a reduction of $9 million as compared to the balance of $19 million at the end of the first quarter.

The $9 million reduction reflects primarily voluntary share exchanges by the lender. In addition to the payment of a monthly installment and shares.

The combined principal balance of the 2022 note and the $75 million senior convertible note is $85 million as of June 30 down from $94 million at the end of the first quarter.

Research and development expenses were $8 $7 million in the second quarter of 2023 compared to $10 6 million in the same quarter in 2022.

The decrease of $1 $9 million was primarily due to a $1 $6 million reduction associated with the discontinuation of development of our engineered NK cell therapy pipeline and $700000 in lower armour search phase III spend including a decrease in payments for manufacturing services, partially offset by a decrease of 400000.

And Israeli innovation authority income.

Commercial expenses were $3 9 million in the second quarter of 2023 compared to $3 2 million in the second quarter of 2022, the increase of $700000 was attributable to an increase in launch readiness activities.

General and administrative expenses were $6 $3 million in the second quarter of 2023 compared to $4 3 million in the same period in 2022.

The increase of $2 million was associated with higher professional services expenses of $1 million in part due to the April follow on offering and business development activities.

Financial expenses were $12 $9 million net in the second quarter of 2023 compared to $500000 in the same period of 2022.

The increase was $12 4 million was primarily due to noncash expenses totaling approximately $10 $4 million, including the fair value impact on our warrants liability of $4 9 million.

Fair value impact on the 2022 convertible notes of $4 3 million and a decrease in capitalization of finance cost of fixed assets of $600000.

In addition, the increase was due to higher cash expenses of $2 million, including $1 7 million and issuance costs from our April 2023, underwritten public offering and an increase of $1 million in interest expenses associated with the 2022 convertible note.

Partially offset by increased interest income of $500000.

Our net loss was $31 7 million in the second quarter of 2023 compared to a net loss of $18 6 million in the second quarter of 2022, driven primarily by the increase in financial expenses of $12 4 million.

As I mentioned before as of June 32023 give me to sell had total cash and cash equivalents of $54 1 million compared to $64 7 million as of December 31, 2022.

The decrease of $10 4 million is due primarily to net cash used in operating activities of $44 3 million.

We offset by $34 7 million in net cash proceeds from the issuance of shares and warrants in our underwritten public offering along with the issuance of shares via the ATM facility.

Just going to the quarter close and through August nine the company raised an additional $14 million in net proceeds via the ATM facility.

The company expects its current cash and cash equivalents, including the funds raised via the ATM subsequent to the close of the second quarter to support its ongoing operating activities into the second quarter of 2024 based on commuter sales current operational plans and excluding commercialization activities beyond the initial launch of armour search as well as the.

Any additional financing activities that may be undertaken.

We believe that this cash runway will enable us to effectively support the launch of armour search while pursuing strategic alternatives.

With that I will turn the call back over to Abbe for some concluding remarks.

Thank you Terry.

Before I turn the call over to the operator for questions I want to bring us back around to the beginning of the call and summarize the key points from our discussion today.

We've made great progress on the commercial launch of Omni search we are on track to possibly exceed our goal of Onboarding, 10% to 15 transplant centers. This year, which is the first prong of our two pronged strategy.

And we have confirmed coverage from payers that cover more than 85% of commercial lives along with securing Medicare coverage and reimbursement.

We are also continuing to execute on the second prong of our strategy to pursue a strategic partnership or transaction in order to expand transplant center, onboarding and accelerate patient access to omni search.

Conversations with potential strategic partners are ongoing.

The phase one clinical trials for GDA 201 is proceeding as expected and we look forward to the data readout in early 2024.

We have strengthened our balance sheet significantly, enabling us to effectively drive these efforts and extending our cash runway into Q2 of 2024.

Most importantly, we are thrilled that patients now have access to a new stem cell donor source. We believe our early launch success is a promising sign of <unk> long term potential to increase access and address critical unmet needs in stem cell transplantation.

Now, let's open the call for questions.

Operator.

Thank you if you would like to ask a question. Please press star one one.

Your question has been answered and you'd like to remove yourself from the queue. Please press star one again.

Our first question comes from Jason Butler with JMP Securities. Your line is open.

Hi, Thanks for taking my questions and congrats on all the progress.

Just wondering if some more color on the patients that are already in the <unk> assist program, where along the process towards treatment are there and what would need to happen between now and then actually getting treated or between now and you actually starting the manufacturing process for these patients.

Hi, Good morning, Jason It's Michele and thank you for the question.

So we do have patients enrolled and can meet a seller so hence the commercial manufacturing process.

Now underway.

From the standpoint of just a reminder, we have successfully manufactured on our search for value at this facility for both our EAP and clinical trials.

So the team is excited to now have the commercial manufacturing process started too.

So Jason let me pause there and see if I fully addressed your question.

Yes, yes, I guess just to clarify does that mean that you already have reimbursement approval for these patients and then can.

Can you. If you can can you give us a sense of the patient then you meters Thats now are they more heavily weighted towards commercial plans or Medicare. Thanks.

Yes excellent questions. So let's start with both the coverage.

Could you talk about okay, Jason could you hear me okay.

Yeah, Yeah, Okay perfect great.

Let's start with coverage and reimbursement and then we'll talk about the patient mix. So from the standpoint of coverage and reimbursement, we're very encouraged with where we stand on both the commercial side and the CMS side. So let me start with commercial so coverage. We had concern is on standby.

We have confirmed coverage for commercial payers, who cover over 85% of the commercial lives. So thats the coverage from a reimbursement standpoint.

What we're hearing so far from the centers.

They are generally working with their respective payers utilizing single case agreements those that have gone through already have gone through very smoothly and consistent with expectations from both the payer side on the center side. So that's the reimbursement side on the commercial side coverage and reimbursement for CMS.

Or Medicare specifically, we did receive our ICD 10 code last year and coverage was mapped to DRG, 14th which is where we'd expect it to be for an allogeneic stem cell transplant and in June we received confirmation from CMS that reimbursement will be covered under the legislation that led to sell.

One O H so in.

And that covers donor sources as a pass through so from the standpoint of Medicare we have both the confirm coverage and reimbursement.

You asked about the patients that aren't <unk>, we see a mixture of commercial and CMS patients.

And yes, as I mentioned, we're very in coverage and very encouraged by both the confirmed coverage and also the reimbursement process to date on both the commercial and the Medicare side.

Yeah.

Great and then just last one for me if you if you hit the target of Onboarding centers. This year do you have the resources to continue to onboard centers above that initial target. Thanks.

So as we mentioned in our prepared remarks, we are adding additional account managers. So for commercial account managers and Roni and her team are adding additional MSL. Then youre question is various too we do need to make sure that as that level of interest from centers continue.

As to grow which we're very encouraged by that we have the appropriate resources. So hence the additional resources that will be adding on both account manager on the MSL side.

Okay, great. Thanks for taking my questions.

Yes.

Okay.

Okay.

Gil Gil.

Next in the queue.

Hi, This is Ethan on for Gil. Thank you for taking our question.

I was just wondering if.

If you could tell us based on the 12 centers on boarded so far how many of those are.

Previously involved in clinical studies versus those not because I know that was the previous point at the analyst day and then the second question is.

During the analyst event I believe you guided that first commercial manufacturing might initiate in the third quarter I was wondering if you're still on track for that or if that's changed thank you.

Yes. This is Michele and thank you for the question. So let me I'll take the first one in regards to clinical the 12 centers onboard and clinical study.

Study participation the vast majority of the centers onboard it we're not in the clinical study.

So yes, we're very encouraged by the fact that we have the strong level of interest from centers, who were not part of the clinical studies.

Our medical team has worked very closely with them as have our commercial team for Onboarding. So that's the first question. The second question. We do have patients enrolled in gamete of cell assist so hence once they are enrolled in can you just tell assess the commercial manufacturing process does initiate.

Alright, So let me stop there are questions.

Excellent. Thank you.

Okay I'd like to ask a question. Please press star one one.

Okay, I think well.

Concludes our Q&A there are no further questions I'd like to turn the call back over to Abbey Jenkins, President and CEO for closing remarks.

Thank you all again for joining us to recap just a few months after FDA approval of Army Serge <unk> is well positioned to bring <unk> to patients with hematologic malignancies in need of a stem cell transplant and transplant centers across the country. Our team at <unk> is working hard to meet the significant interest we have.

We're seeing from transplant centers and we are so excited at the prospect of bringing omni search to patients.

You everyone for joining us on today's call and we look forward to providing further updates on future calls thank.

Thank you.

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