Q2 2023 2seventy bio Inc Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the 270 Bio Second Quarter 2023 earnings conference call. At this time, all participants are in a listening mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is free.
Operator: To withdraw your question, please press Star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your day, Jen Snyder, head of corporate affairs. Please go ahead.
Jenn Snyder: Thank you, operator. This morning, 270 Bio issued a press release providing a business update in addition to its second quarter 2023 financial results. The press release can be found in the Investors and Media section of the company's website at 270bio.com. Speaking on the call today are Nick Leshley, Chief Kairos Officer, Chip Baird, Chief Financial Officer, and Steve Bernstein, Chief Medical Officer. Philip Gregory, Chief Scientific Officer, is also on the line for the Q&A section.
Jenn Snyder: As a reminder, today's discussion will include forward-looking statements related to 270's current plans and expectations, which are subject to certain risks and uncertainties. These forward-looking statements include statements regarding our strategic plans, timelines, and expectations, as well as statements regarding our financial condition, expectations, and other future financial results, among others. Actual results may differ materially due to various risks, uncertainties, and other factors, including those described in the risk factors section of our most recent Form 10K and other SEC filings.
Jenn Snyder: These forward-looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date. You are cautioned not to place any undue reliance on these forward-looking statements, and, except as required by law, we undertake no obligation to update or revise any forward-looking statements. At this time, I would like to turn the call over to Nick Leshley. Thanks, Jen.
Nick Leschly: Good morning, everyone, and thank you for joining us as we discuss our second quarter, 2023 results, and business update. We are now well into our second full year as 270 bio, executing on our mission of giving more time to people living with cancer through the transformative power of cell therapy. Since the creation of 270, our mission has always been dual-propelled, to deliver on the commercial potential of a BECMA and to leverage our translational engine to develop an innovative cell therapy pipeline.
Nick Leschly: And in the first half of 2023, we've made important progress against these goals. With BECMA, we continue to successfully deliver it in the commercial setting to an extensive and growing number of people living with multiple myeloma who are in need of better treatment options. We recently hosted a myeloma patient and his wife at our all-hands meeting. It was humbling, inspiring, and a deep reflection of our wine.
Nick Leschly: At the same time, we recognize we are in the midst of a rapidly evolving competitive environment, which is expected to impact the second half of Beckma's performance. Chip will comment more fully on Beckman market dynamics. And I can say that we've spent a significant amount of time with the broader BMS team to hear not only their rationale for the long-term belief in the potential of Beckma but also the month-to-month tactical inline commercial strategy. It is both grounded in a strong understanding of the landscape and very well supported by internal resources, from the CEO to the sales rep, given their conviction to the cell therapy field.
Nick Leschly: Overall, we're making significant short and long-term investments with BMS to maximize the potential of this important therapy for patients. On the development side, we continue to apply our scientific knowledge and research engine to address some of the most pressing therapeutic challenges in oncology. We have a number of preclinical and clinical programs in liquid and solitum, and the common thread is that we're using layered cell therapy approaches to deliver potentially transformative impact for patients. One such program is Derek 33.
Nick Leschly: Since the Grade 5A in June, the 270 and Seattle Children's Team have conducted the root cause investigation and that developed potential amendments to the Platte 08 protocol. This past Friday, Seattle Children's received the official notice of the FDA clinical hold. This was expected, and we need to hear more from the FDA in terms of their specific concerns and how they will impact the potential path forward for the program. Steve will provide more details later in this call. Our pipeline programs are stacked with innovation and represent multiple opportunities for us to make unincremental steps forward for patients with cancer. That said, we will also be clear-eyed and disciplined about these programs.
Nick Leschly: And if a program is not clearing a very high bar, we will terminate and allocate capital elsewhere. I look forward to your questions, but for now, I'll hand it over to Chip to talk more about the challenges we encountered in our Q2 results. Chip?
William D. Baird: Thanks, Nick, and thanks to everyone for joining the call. Abeckman delivered solid results in the second quarter with $115 million of revenue in the United States. As a reminder, we are in a 50-50 co-co with BMS for the U.S. Abbeckman, and we record collaboration arrangement revenue, which represents our 50% of the operating profit of the U.S. In the quarter ending June 30, we recorded $24.5 million of collaboration arrangement revenue related to the Beckmark collaboration.
William D. Baird: This is better than we had expected, and is driven by an improving gross margin, which in turn has been helped by a continuing improvement in manufacturing success rates, which remain north of 90%. So, as expected, the impact of my collaboration is delivering cash flow of $270. As BMS reported in their 2Q earnings, they are forecasting lower revenues in the third quarter with a return to growth in the fourth quarter.
William D. Baird: Based on this, we have updated our back my U.S. revenue guidance for 2023 to the lower end of our original $470 to $570 million range. We have three important points we want investors to hear on this updated forecast. First, the downward revision was not driven by the scheduled maintenance of the S12 manufacturing facility. This maintenance was planned and built into the original forecast and as a normal course for aseptic manufacturing. The shutdown was successful, and we're back online. Second, the downturn is due to a competitive, to a dynamic competitive landscape.
William D. Baird: And in the fifth line plus setting, the original patient bolus has been largely addressed, and we are now in an incidence-based market, but with a December pedufid date for a potential label expansion to third line plus, We believe there is a significant, larger opportunity for a back-McCUMM. We are investing with BMS in manufacturing capacity for 2024 and beyond to address this larger opportunity. Third, the BMS commercial team We continue to close to manage our expenses, and together with the improving contribution from the Beckma collaboration, you can see the impact on our bottom line. For the second quarter of 2023, we recorded a net loss of 42.1 million, down significantly from a net loss of 77.4 million for the same period last year.
Steven Bernstein: We remain committed to maintaining our cash runway into at least 2026, and we continue to actively evaluate pipeline investments and our overall cost structure. With that, I'll hand it over to Steve to provide some additional detail on the update we provided this morning regarding our AML program.
Steven Bernstein: Thanks, Chip. Good morning, everyone. In June, we announced a pause in our Platte 08 study in AML in response to a fatal grade 5 serious adverse event. This event occurred in the first patient treated at the second dose level in the phase one trial. It cannot be stated enough that the safety of every patient who participates in our studies or receives our therapy is the utmost priority for us, and we continue to keep the patient's family in our thoughts.
Steven Bernstein: Since that time, and in collaboration with Seattle Children's, both our partner and the regulatory study sponsor, we have been conducting a thorough investigation of the root cause of this event. This investigation has provided insights into the pathobiology of this toxicity, leading to several study protocol changes, which the team believes may mitigate this toxicity and allow for the continuation of the Platte-O8 study.
Since that time and in collaboration with Seattle children's both our partner and the regulatory studies sponsor we have been conducting a thorough investigation of the root cause of this event. This investigation has provided insights into the past the biology of this toxicity, leading to several study protocol changes, which the.
Team believes may mitigate this toxicity and allow for the continuation of the plateau weight study as a result, our collective team is actively amending the protocol and as Nick shared we received formal notice of FDA clinical hold on Friday afternoon, We will continue to collaborate with Seattle children's.
Steven Bernstein: As a result, our collective team is actively amending the protocol, and as Nick shared, we received formal notice of an FDA clinical hold on Friday afternoon. We will continue to collaborate with Seattle Children's and the FDA to determine appropriate next steps and a potential path forward here. I'm happy to address any questions in the Q&A portion, but for now, we'll pass it back to Nick. Thanks, Steve.
And the FDA to determine appropriate next steps and a potential path forward here.
I'm happy to address any questions in the Q&A portion, but for now I will pass it back to Nick.
Nick Leschly: We appreciate everyone's time, and we'll close by saying that we remain committed to delivering for patients, to innovation, and to driving value for shareholders. There is no hiding that this has been a hard and rapidly evolving period for the company and all stakeholders. We are focused on doing everything we can to adjust and improve our strategic focus and day-to-day execution to enable us to best deliver for all stakeholders, including hardworking, dedicated employees, committed shareholders, and, of course, patients and families in need. With that operator, you may now open the line for questions.
Thanks, Steve we appreciate everyone's time and will close by saying that we remain committed to delivering for patients to innovation and to driving value for shareholders. There is no hiding that theres been hard.
Hard and rapidly evolving period for the company and all stakeholders. We're focused on doing everything we can to adjust and improve our strategic focus on day to day execution enable us to best deliver across all stakeholders, including hard working dedicated employees committed shareholders and of course patients and families in need with that operator, you may now open the <unk>.
Line for questions.
Operator: Thank you. As a reminder, to ask a question, please press Star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 1-1 again. We ask that you please limit yourself to one question.
Thank you as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to a draw. Your question. Please press star one again.
We ask that you please limit yourself to one question. Please standby, we compile the Q&A roster.
Operator: Please stand by, while we compile the Q&A roster. Our first question comes from the line of Salveen Richter with Goldman Sachs. Your line is now open. Well, thank you for taking our question. This is Tommy on behalf of Selvine.
Okay.
Our first question comes from the line of Saudi <unk> Richter with Goldman Sachs. Your line is now open.
Well. Thank you for taking our question. This is Tommy on for solving can we just get a little bit more detail about the drivers behind the updated revenue guidance I believe that you mentioned that it was not due to the pre scheduled shutdown, but more so the patient demographic just some more color on that would be helpful. Thank you.
Nick Leschly: Can we just get a little bit more detail about the drivers behind the updated revenue guidance? I believe that you mentioned that it was not due to the pre-scheduled shutdown but more so patient demographics. Just some more color on that would be helpful.
Nick Leschly: Thank you. Yeah, this Nick, I think Chip can jump into that. I think we've certainly been watching all the various moving parts, and one thing that, you know, you know when these maintenance windows come. We had some confusion in the marketplace, and I think people were looking at that and saying, wasn't that a bit of a surprise, or why was that a surprise? And we just wanted to make clear that it wasn't, right?
Yes. This is Nick I think chip can jump into that I think we've certainly been watching all the various moving parts and one thing that you know when these maintenance has come we had some confusion in the marketplace. So I think people are looking to that and saying wasn't that bit of a surprise.
Why was that a surprise and we just wanted to make clear that it wasn't right I think what is evolving as the dynamics in the marketplace and as chipset and can elaborate a little bit more on along with BMS. We feel confident is that as the marketplace continues to evolve and as the expansion of the alliance evolves and so it will be the use of our beckmann in combination are not in combination and partnership with <unk>.
Nick Leschly: I think what is evolving is the dynamics in the marketplace. And as Chip said, and can elaborate a little bit more on, along with BMS, we feel confident that as the marketplace continues to evolve, and as the expansion of the lines continues, then so will be the use of a backma in combination or not in combination in partnership with these other treatments for myeloma. But, Chip, you want to provide a little bit more detail on what we know? No, that was well said.
Other treatments for myeloma, but chips, you want to provide a little bit more detail on what we know.
No that was well said I think what we have seen is.
William D. Baird: I think what we have seen is an increase in overall CART capacity, both our capacity, and competitive capacity, as well as the utilization of T-cell engagers and, collectively, more patients in the Fifth Line Plus setting getting innovative therapies, which is great for patients. Again, we view that as a moment in time. The field is going to shift yet again towards the end of this year with our Padofa date and again with other regulatory approvals coming. Stepping back, Myeloma is a huge market. It's a huge opportunity. In history, it has never been a winner takes all.
The increase in the overall.
<unk> capacity, both our capacity competitive capacity.
As well as the utilization of T cell engages and collectively.
More patients in that setting.
Getting the innovative therapies, which is which is great for patients again, we view that as a moment in time the field is going to.
A shift yet again towards the end of this year with with our Paducah date, and again with other regulatory approvals come in.
In back myeloma is a huge market, it's a huge opportunity the history has never been.
William D. Baird: And so I think these therapies will all have important roles to play, and we certainly see that for another month as well. Thank you. Thank you. Our next question comes from the line of Dana Graybosch with Lee-Rink partners. Your line is known.
Winner take all and so I think these therapies will have an important role to play and we certainly see that for beckman as well.
Yeah.
Thank you.
Thank you.
Our next question comes from the line of Dana <unk> with Leerink Partners. Your line is now open.
Nick Leschly: Hi, thanks for the question. We've been doing some KOL interviews recently, and there's some skepticism, I'd say, in the market that there'll be a lot of demand for CAR-T in the aerial lines of myeloma, just given referral dynamics and maybe hesitancy for community docs to refer their patients earlier. And I wonder what work you've done with BMS that gives you confidence in that demand will and how much more demand you expect as you move into the earlier lines in Karma3. Yes, Nick, I'll take a quick step. I think you could call 100 doctors.
Hi, Thanks for the question.
Doing some kols interview recently and there is some skepticism by random market that there's a lot of there'll be a lot of demand.
Car T.
In the earlier all lines of myeloma, just given referral dynamics that may be hesitancy for community docs to refer their patients earlier and I wonder what work you've done with BMS that gives you confidence.
And that.
Demand will come and how much more demand.
As you move into the earlier lines and Karma three thank you.
Yes, Nick I'll take a quick stab at I think you can call 100, doctors should probably get 100 different answers our view and our conviction in our research in collaboration with BMS is pretty clear that we do think there is a very strong role for car T and a very strong role for that as it gets earlier because at the end of the day cancer is about efficacy it is about.
Nick Leschly: You probably get 100 different answers. But our view and our conviction and our research, in collaboration with BMS, is pretty clear that we do think there's a very strong role for CART and a very strong role for that as it gets earlier because, at the end of the day, cancer is about efficacy. It is about having a dramatic impact. The sooner you can have that, the more impactful it will be over the long term.
Having a dramatic impact Ms June or you can have that the more impactful will be over the long term. So we think thats certainly has to be proven out through the data, but it is starting to be proven out by the data by us as well as other car Ts.
Nick Leschly: So we think that certainly has to be proven out through the data, but it is starting to be proven out by the data from us as well as other CARTs. So in that sense, we have very strong conviction that fifth line, fourth line, third line, second line, and certainly first line is going to be an area where we'll have a very strong contribution in place in the marketplace. Convenience is certainly a factor, especially if you have no alternatives.
In that sense, we have very strong conviction that fifth line fourth line third line second line and certainly first line is going to be an area, where we will have a very strong contribution in place in the marketplace convenience is certainly a factor, especially if you have no alternatives. So for example in.
Nick Leschly: So, for example, in the fifth line setting, if you can't get a hold of our CAR-T, what are you going to do? If you don't have time, you're going to take whatever's available. And that is the dynamic that we've seen. But we don't think that is a data-driven dynamic. That is an availability-driven dynamic. And so, over time, that will, we believe, evolve, especially as we get into the third line and then as you go even further. And I think we've heard the same thing from our J&J colleagues, as well as anyone else who has a CART.
In the first line setting if you can't get a hold of our car T. What are you going to do.
Don't have time youre going to take whatever is available and that is the dynamic that we've seen we don't think that is a data driven demand that isn't availability driven dynamic and so over time that will we believe evolve, especially as we get into third line and then as you go even further and I think we've heard the same thing out of our J&J colleagues as well as anyone else who has a car T. So we're pretty confident but.
Nick Leschly: So we're pretty confident, but again, that's something we'll have to play out quarter by quarter. Thank you. Our next question comes from the line of Yaron Werber with TD Cowan. Your line is now open.
Again, that's something we'll have to play out quarter by quarter.
Okay.
Thank you.
Our next question comes from the line of Youre wrong Werber with TD Cowen. Your line is now open.
Nick Leschly: Great, thanks for taking that. I have a couple of questions. One, when you're thinking dynamically about what's going on in the competitive market right now, was the issue in the quarter sort of just prioritizing the wait list or the list in general in clinics to make sure that they match up with supply? Because, obviously, there's obviously plenty of demand out there. And secondly, it sounds to me like your Q3 is going to be sort of a downturn over Q2, and then Q4 is going to grow over Q3.
Great Thanks for taking them.
Couple of question one.
When youre thinking dynamically what's going on in the competitive market right now was the issue in the quarter sort of just prioritizing the wait list or the list in general and clinics to make sure that they match up with supply because obviously there is obviously plenty of demand out there.
<unk>.
It sounds to me like your Q3 is going to be sort of a downtick over Q2, and then Q4 is going to grow over Q3 can you just explain a little bit I know July is obviously, mostly offline because of the way. It worked out but are you holding back to your capacity back in may or are you able to increase it at this point by the end of the year and how fast will that happen.
Nick Leschly: Can you just explain a little bit? I know July is obviously mostly offline because of the way it worked out, but are you totally back to your capacity in May, or are you able to increase it at this point by the end of the year? And how fast would that happen?
William D. Baird: Thank you. Chip, you want to just, I know you had a few comments there. Yes, thanks, Your Own. Yeah, I think you have it right. The third quarter is impacted by the June shutdown.
Yes.
Chip do you want to just I know you had a few comments there.
Yes, Thanks Ron.
You have it right.
Third quarter is impacted.
William D. Baird: So again, as we've talked about, the June slots become July revenue, so there's roughly a month lag between them. So July is a light month, which contributes to the expectation that the third quarter will be down. But we do expect a return to growth as we move, you know, month to month and quarter to quarter here, driven by a couple of different factors. We're with BMS, expanding the number of sites and the overall commercial footprint.
By the June shutdown, so again as we've talked about the June slots become July revenue. So thats roughly a month lag. There. So July is a light month, which contributes to the expectation that the third quarter is down.
We do expect.
<unk> returned to growth as we move month to month and quarter to quarter here.
Driven by a couple of different factors.
With BMS, expanding the number of sites and the overall.
William D. Baird: We're expanding the number of reps and people in the field detailing, and back when I'm talking to providers, not just at academic centers but in the community setting. And back to Dana's earlier question, I think that's an important dynamic here as well as that community referral dynamic. That's important, the fifth line, will be important in the earlier lines as well.
Commercial footprint, we're expanding the number of.
<unk>.
Reps and people in the field.
Detailing it back by talking to.
Traders not just at academic centers, but in the community setting and back to.
Dana's earlier question I think thats, an important dynamic here as well is that community referral dynamic that's important if this line will be important in the earlier lines as well.
William D. Baird: So, you know, again, I think it'll evolve over time, but certainly, from the top on down, this is a priority for us. This is a priority for BMS as well. And, Your Honor, just to highlight a few things that Chip just said because I think this was and is a very active and has been a very active ongoing effort. I'm sure you've chatted with the equivalent folks over at BMS, and we certainly have, that there's a pretty dramatic full force investment going on across the capacity, which has been a lot of the focus, but also around sites, around sales, boots on the ground, et cetera, where now you're getting to a more traditional kind of share of voice situation where you want to make sure that people have access.
So again I think it will evolve over time, but we certainly.
From the top on down this is a priority for <unk>.
This is a priority for us as well.
And Ron just to highlight a few things that chip just said because I think this was and is a very active and has been a very active ongoing effort I'm sure you've chatted with the equivalent folks over at BMS and we certainly have that there is a pretty dramatic full force.
<unk> been going on across the capacity, which has been a lot of the focus but also around sites around sales boots on the ground et cetera, where now youre getting to a more traditional kind of share of voice situation, where you want to make sure that people have access, but it has still been settling right and I view. This what happened in the last quarter last six months is still very much a settling phenomenon. It is not a.
William D. Baird: But it has still been settling, right? And I view this, what happened in the last quarter, the last six months, it's still very much a settling phenomenon. It is not, you know, the kind of situation.
Nick Leschly: is done and over. That is not the way we look at this. It's very much a growth and continued settlement, and I think there's going to be more than enough growth opportunity for both BACMA and certainly the other assets in CAR-T, as well as the TCEs that are sitting out. There are other drugs that are coming forth in myeloma. We've seen that again and again and again.
Kind of the situation is done and over.
That is not the way we look at this very much a growth and continued settlement and I think theres going to be more than enough.
Growth opportunity for both the back months certainly the other assets in car T as well as the Tcs that are sitting out there or other.
Drugs that are coming forth in myeloma, we've seen that again and again and again, we're just in that early ramp up phase and our Bakken was one of them in this quarter certainly.
Nick Leschly: We're just in that early ramp-up phase, and a BACMA is one of them. And this quarter, certainly, the situation we're in right now is very much evolving and one that I don't think anyone has a clear understanding of. We're getting one.
Sort of the situation. We're in right now is very much evolving and one that I don't think anyone has a clear understanding on we're getting one ourselves as better and one that has led us to a lot of confidence and we are happy to see the BMS shares that confidence and certainly have no waiver in their stance.
Nick Leschly: ourselves that is better and one that has led us to a lot of confidence. And we were happy to see that BMS shares that confidence and certainly has no waiver in their stance. Thank you. As a reminder, to ask a question at this time, please press star 1-1 on your touchstone telephone. Our next question comes from the line of Kelsey Goodwin with Guggenheim. Your line is now. Oh, hey, good morning.
Thank you.
As a reminder to ask a question at this time, Please press star one one <unk> telephone.
Our next question comes from the line of Kelsey Goodwin with Guggenheim. Your line is now open.
Nick Leschly: Thanks for taking my question. Maybe, shifting gears off of BECMA, maybe could you just provide some more color on the toxicity root cause analysis in the Plato Aid study? And maybe could you provide some color on what protocol changes were made post analysis? Thank you. Kelsey, this is next.
Oh, Hey, good morning, Thanks for taking my question, maybe shifting gears off we'll go back Matt maybe you could you just provide some more color on the toxicity root cause analysis and the plateau rate steady and maybe could you provide some color on what protocol changes were made.
Post analysis. Thank you.
Nick Leschly: Great question, and I'll save my colleague, Steve, from a painful sort of non-answer. Right now, we're very much, like you said, we have done the root cause analysis. We're confident that we have some proposals in collaboration with the FDA to get this study sort of back up and rolling. But we can't get into the details of that right now because we want to make sure we honor the relationship not only with the study and the patients but also with the FDA. So that's about as far as we can go at this point in time. So the wording that we chose there was pretty specific, that it's ongoing. Going
I guess this next great question, then I'll save my colleague, Steve here, Steve from a painful.
Non answer right now we're very much like you said, we have done the root cause analysis. We are confident that we have some proposals in collaboration with the FDA to get this study sort of backup enrolling we can't get into the details of that right now because we want to make sure. We honored the relationship not only with the study and the patients but also with the FDA. So that's about as far as we can go at this point in time.
So that was the wording that we chose there was pretty specific that it is ongoing we have a plan it's shared with cri and the FDA engagement has begun and so we're confident but we will share details of a subsequent date.
Nick Leschly: We have a plan. It's shared with SCRI, and the FDA engagement has begun, and so we're confident, but we'll share details at a later date. Thank you. Our next question comes from the line of Vikram Purwit with Morgan Stanley. Your line is now open. Hi, good morning. Thanks for taking our questions. Just two quick ones from our side.
Thank you.
Our next question comes from the line of Vikram <unk> with Morgan Stanley . Your line is now open.
Hi, Good morning, Thanks for taking our question just two quick ones from our side first on the increase.
Nick Leschly: First, on the increased commercial presence you alluded to from VMS, could you talk a little bit more about the kind of the size and scope of that increased commercial muscle that BMS plans to put into BACMA. What is the scale of that, and what are some of the key messages that you've discussed with BMS that they'll be putting forward to help BACMA compete further? And then secondly, could you remind us what's implied from a pipeline development standpoint in your cash runway guidance for 2026? Thanks. Yeah, hi, it's Nick again. Thanks, good question. So you're also going to be a little, probably not totally satiated with my answer.
Commercial presence you alluded to from BMS side could you talk a little bit more about kind of the size and scope of that increased.
Commercial.
Muscle.
BMS plans to put into <unk>.
What.
What is the scale of that and what are the key messages.
That you've discussed with BMS that.
There'll be putting forward.
Beckman compete further and then secondly could you remind us with.
Implied from like a pipeline development standpoint, and your cash run rate guidance for 2026.
Yeah, Hi, it's Nick again. Thanks. Good question, so you're also going to be a little probably.
Nick Leschly: We're not going to provide the details on that expansion there, but it is sizable and significant, both in terms of the sites and the intention there. So that rollout, getting to more and more centers in a rapid fashion still the leaders in the field on that, but also people on the ground across their cell therapy capabilities because the innovation-based cell on this is something that's really important, and that is an exciting piece. So that I feel a lot of confidence in, and Chris, the incoming CEO there, is very much committed to and behind cell therapy. He always has been.
Not totally associated with my answer we're not going to provide the details on that expansion there, but it is sizable and it is significant both along the sites and the intention there that so that rollout getting to more and more centers in a rapid fashion is still the leading in the field on that but also people in boots on the ground across our cell therapy capabilities, because the innovation base.
Sell on this is something that's really important and that is an exciting piece. So that I feel a lot of confidence on and Chris incoming CEO . There is very much convicted in behind cell therapy always has been he has been our lead contact throughout our entire relationship. So we're very pleased to see that you've got the opportunity to be the incoming CEO . So in that sense I'm confident around the.
Nick Leschly: He's been our lead contact throughout our entire relationship, so we were very pleased to see that he got the opportunity to be the incoming CEO. So in that sense, I'm confident about the commitment in that regard. As far as it relates to what the messages are, that will become clear in the field, but we certainly stand behind the real world evidence and how people are experiencing Beckman in a very consistent manner, not only from a manufacturing point of view but from a safety point of view and efficacy point of view.
In that regard as far as it relates to what the messages are that will become clearer in the field, but we certainly stand behind the real world evidence and how people are experiencing backman, a very consistent manner not only from a manufacturing point of view, but from a safety point of view, an efficacy point of view and so theres lots of ample data out there that will continue to evolve that leads us to believe.
Nick Leschly: And so there's lots of ample data out there that will continue to evolve that leads us to believe that it's sort of one of the drugs of choice for sure in the CART space. And as it expands, we feel that there are plenty of opportunities that relate to that. And those are the types of messages people are going out there with.
That is sort of one of the drugs of choice for sure in the car T space and as it expands we feel that there is plenty of opportunity as it relates to that and those are the types of messages people are going out there with and that that is as you know is going to be a quarter by quarter now kind of battle. If you will but one that BMS is certainly used to and they're experienced in myeloma is.
Nick Leschly: And that, as you know, is going to be a quarter by quarter kind of battle, if you will. But one that BMS is certainly used to, and their experience in myeloma probably exceeds just about any other player in the space, given their cell gene history. Do you want us to address this? Oh, sorry.
Probably exceeds just about any other player in the space given their celgene history.
Okay.
William D. Baird: Go ahead. I think the second question was just about getting into 26 and what's assumed there. And I think, you know, we assume a contribution from the back one, which you've already seen, and that that contribution from a cashional perspective continues and starts to ramp as we move into the third-line setting. But certainly, between the overall utilization and the margin pickup that we've seen there, that's something that we feel good about. and will continue to closely monitor and, and A drive towards, you know, from an investment perspective, we have a number of shops on goal in the clinical setting and then moving into the clinical setting. Our goal in the first 15 to 30 patients is to achieve human proof of concept in an unincremental way.
The address sorry.
Second question I think the second question was just into 'twenty.
<unk> 26, and what's assumed there and I think we assume.
Contributions from our Bakken Whats youre already seen and that our contribution from a cash flow perspective continues and starts to ramp as we move into the third line setting, but it's certainly between the overall utilization and the margin.
The pickup that we've seen there that's something that we feel good about and will continue to closely monitor and.
A drive towards from.
From an investment perspective, we have a number of shots on goal.
Clinical setting and then moving into the clinical setting our goal in the first 15% to 30 patients is to achieve human proof of concept in an incremental way and either we see that or we move on and as Nick said before we allocate capital elsewhere.
William D. Baird: And either we see that or we move on, and we, as Nick said before, allocate capital elsewhere. The other thing that, you know, we've been emphasizing, and we showed this slide on our R&D day, but just to say it again, a lot of that R&D is funded through collaborations, whether it's the solid tumor programs with regeneron, whether it's our investment in a backmo with BMS. We actually have a good amount of subsidy that comes from the collaborations that we've put in place to enable us to develop a cell therapy pipeline across a number of programs.
The other thing that we've been emphasizing it and we showed this slide on our R&D day, but just to say it again a lot of that R&D is.
Funded through collaborations whether it's a solid tumor programs with regeneron, whether it's our investment in our backlog with BMS.
We actually have.
A good amount of subsidy.
Comes from the collaborations that we've put in place to enable us to prosecute a cell therapy pipeline across our.
A number of programs.
Nick Leschly: Just one last thing I'll add to the course, real quick on the backside of a Beckma, just to go back to it. Because I find this, entertaining is the wrong word, but I find it curious to see how everyone is so quick to draw conclusions on the performance of a drug and the future of a drug based on the sort of information that is happening in real time. And I think if Cartier has shown us anything over the last couple years is that we don't know what the hell we're talking about half the time as it relates to what the opportunity is at that moment in time because the field is digesting this. The FDA is digesting it.
Just one last question real quick on the back side of a backdrop just to go back to it because I find this.
Entertaining the wrong word, but I find it curious to see how everyone is so quick to draw conclusions on the performance of a drug in the future of a drug based on sort of information that is happening real time, and I think if car T has shown us anything over the last couple of years is that we don't know what the Hell, we're talking about half the time as it relates to what the opportunity is at that moment in time, because they feel.
This digesting as the FDA is digesting this manufacturing specialists are digesting the sites are digesting all of this and that we're still very much in that space. So from our point of view this quarter on the Bounciness of this quarter has no reflection on the future of this opportunity as it relates to <unk>. The one thing we know about myeloma is it has unfortunately, a tremendous number of patients that are in need.
Nick Leschly: This. Manufacturing specialists are digesting this. The sites are digesting all this and recognizing that we're still very much in that space. So from our point of view, this quarter and the buoyancy of this quarter has no reflection on the future of this opportunity as it is really still Beckma. The one thing we know about myeloma is it has, unfortunately, a tremendous number of patients that are in need. And that is going to continue to expand, and Beckman's going to have a very strong role in that. We feel very strongly about that, and it'll play out quarter by quarter. But the long-term aspects and potential of this medicine have never been in question, nor is it currently in question.
And that is going to continue to expand in our Bakken was going to have a very strong role in that we feel very strongly about that and it will play out quarter by quarter, but the long term aspects. Some potential. This medicine has never been a question nor has any question for BMS.
Nick Leschly: for BMA. Got it. Thank you. You're welcome.
Got it thank you.
Youre welcome.
Operator: Thank you. Our next question is a follow-up from the line of Dana Graybosch with Lee-Rink Partners. Your line is now open.
Thank you. Our next question is a follow up from the line of Dana <unk> with Leerink partners. Your line is now open.
Nick Leschly: Hi, thanks for the second question for me. I'm going to ask another Abechma question, and I'm sorry, Nick, to ask you to look at what's happening at the moment. You have really different sites, sites where they're big academic centers and both the competitive car key and a Bechma are offered.
Hi, Thanks for a second question for me I'm going to ask another one.
Sorry, Nick ask you to look at what's happening in the moment.
You have.
Really different site site, where there are big academic centers then.
Both the competitive car T. In it that are offered and then BMS has really already.
Nick Leschly: And then BMS has really already expanded the sites to sites where the other competitive car keys don't have available slides. And I wonder what you're learning from in these two different types of sites competitively, those that have more options and those that have fewer options, if you have any insights that you've gained as you have more slots available on the demand and the competitiveness and any implications of that going forward. Yeah, I do, frankly, and so does BMS, but frankly, it's not one that we're going to spend a lot of time talking about publicly, because it is exactly that dynamic that gives us quite a bit of confidence, which is there are some centers, certainly, that have both available, they're one that in some cases just a Beckma available, and we're following that at a site-by-site level, and that's something that gives us insight into utilization.
The site, where the other competitive car Ts I don't have available slide and I Wonder what Youre learning from and these two different types of site competitively those that have more options and those fewer option. If you have any insight that you gain as you have more slots available on the demand.
And the competitiveness and.
Any implications of that going forward.
Yeah, I do frankly, and so does BMS, but frankly, it's not one that we're going to spend a lot of time talking about publicly.
Because it is exactly that dynamic that gives us quite a bit of confidence which is there are some centers certainly that have both available there wanted to have.
Some cases, just a backroom available and we're following that on a site by site level and that's something that gives us insight into utilization and in some cases generically speaking right. We will have a good experience with one drug or the other and youre going to move in one direction or the other for a period of time, but as people get and want to use both medicines more frequently we're not seeing.
Nick Leschly: And in some cases, generically speaking, people have a good experience with one drug or the other, and you're going to move in one direction or the other for a period of time. But as people get older and want to use both medicines more frequently, we're not seeing that one light goes out, and one light turns on, and that's the end of the story.
On that one light goes out and one light turns on and Thats. The end of the story very much not the dynamic and Bms's footprint has expanded but has not expanded greatly in the last few months and partly because that's where we're going from a demand basis, right, where you're supply constrained to now go into where you actually want to drive more and more demand because supply.
Nick Leschly: Very much not the dynamic. And BMS's footprint has expanded, but it has not expanded greatly in the last few months, partly because that's where we were going from a demand basis, right, where your supply is constrained, to now going to where you actually want to drive more and more demand because supply is catching up. So I continue to have that dynamic. I think a BECMA performs very well in the real world. We saw that in the data and also in the dialogue as it relates to how a provider can have very clear expectations of the efficacy and safety profile and clarity on the probability of being able to manufacture. Lots of those things, I think, put Beckma in a very good position.
As is catching up so I continue to have that dynamic I think of Beckman performed very well in the real world. We saw that in the data and also in the dialogue as it relates to how provider can have very clear expectations of the efficacy and safety profile and clarity on the probability of being able to manufacture lots of those things I think puts us back on a very good position and the analytics.
Nick Leschly: And the analytics that I won't go into detail on very much support that. And that's something that we will play up. But does that mean we know everything? No, not at all.
That I won't go into detail on very much support that and that's something that will play out does that mean, we know everything no not at all does it mean, we have confidence about the future and are placing that I would go so far as to say, yes on that and I think BMS would agree on that but as you and I. Both know BMS certainly is not.
Nick Leschly: Does that mean we have confidence about the future and our place in that? I would go so far as to say yes to that. And I think BMS would agree with that. But, as we both know, BMS is not sort of prone to sharing a tremendous amount of detail at that level because it's sort of not necessarily relevant. It's also a competitive field.
Sort of prone to sharing a tremendous amount of detail at that level, because it's sort of not necessarily relevant. It's also competitive field. So we're going to continue to participate accordingly.
Nick Leschly: So we're going to continue to participate accordingly. Thank you. Our next question comes from the line of John Newman with Kenakorgenuity.
Thank you.
Our next question comes from the line of John Newman with Canaccord Genuity. Your line is now open.
Unknown Speaker: Your line is now open. Hey guys, good morning, and thank you for taking my question. So you've discussed in the past the ongoing work to transition to suspension vector. I think you've actually investigated that in Karma 3.
Hey, guys. Good morning, and thank you for taking my question. So you've discussed in the past about the ongoing work.
To transition to suspension vector I think you've actually investigated that in.
Unknown Speaker: Curious, when that comes online, should we think about that suspension vector process as giving you more capacity or pushing the success rate even higher? You've always been at a very high success rate, but wondering if it's one of those or perhaps both. Yeah, John, I'm happy to take that one. Yeah, it's the suspension moving towards commercial approval for that early next year. What that does for us is a couple of things. It certainly will help on the gross margin. Suspension is a more cost-effective way of manufacturing vector, which is a key starting material for our manufacturing process.
And Karma III curious.
When that comes on line should we think about that suspension.
Victor process.
As.
Giving you.
More capacity or pushing the.
Success rate, even higher you have always been a very high success rate, but wondering if it's one of those or perhaps both of those thanks.
Yes, John I'm happy to take that one yes.
Yes, it's a suspension moving towards.
Commercial approval for that early next year.
What that does for US is a couple of things.
Certainly will help.
On the gross margin suspension is a.
More cost effective way of manufacturing vector, which is a key starting material for our manufacturing process.
Unknown Speaker: It also has greater capacity, and so that de-risks the supply chain and our ability to continue to scale a drug product. Ultimately, the drug product is what we're going to be focused on for a couple years to come in terms of increasing capacity, but vector and suspension vector are an important components.
It also has greater capacity and so that de risks the supply chain and our ability to continue to scale.
Doug product ultimately drug product is what we're going to be focused on for several years to come in terms of increasing capacity there but factor in suspension vector is an important component of that.
Unknown Speaker: Great, thank you. Thank you. And I'm Sean. No further questions at this time. I'd like to turn the call back over to Nick Leshley for closing remarks. Yeah, thank you, everybody, and thank you for joining us and thank you for the questions. And I would encourage you if you want to understand any of these in more detail to reach out to us. We're more than happy to talk about any elements of this. But for now, I'll just thank everyone for joining the call and hope everyone has a great day. This concludes today's conference call. Thank you for participating. You may now disconnect.
Okay, great. Thank you.
Thank you.
And I'm showing no further questions at this time I'd like to turn the call back over to Nick Leslie for closing remarks.
Yes. Thank you everybody and thank you for joining and thank you for the questions and I would encourage you. If you want to understand any of these in more detailed reach out to us with more than happy to talk about any elements of this but for now I'll just thank everyone for joining the call and hope everyone has a great day.
This.
Today's conference call. Thank you for participating you may now disconnect.
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