Q1 2024 Exscientia PLC Earnings Call
Sara Sherman: Hello, everyone. My name is Sara, and I will be your conference operator today. At this time, I would like to welcome everyone to Exscientia's business update call for the first quarter of 2024. All lines have been placed on mute to prevent any background noise.
Hello, everyone. My name is Sarah and I will be your conference operator today at this time I would like to welcome everyone to extend she has business update call for the first quarter 2024.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Sara Sherman: After the speaker's remarks, there will be a question and answer session. At this time, I would like to introduce Chin Okeke, Associate Director of Strategy and Investor Relations. Chin, you may begin.
Speaker Change: At this time I would like to introduce Chin, Okay, Cai associate director of strategy and Investor Relations.
Chen: Relations Chen you may begin.
Chin Okeke: Thank you, operator, and welcome everyone to Exscientia's first quarter 2024 financial results and business update conference call. A press release and 6k were issued this morning with our first quarter 2024 financial results and business update. These documents can be found on our website at investors.exscientia.ai along with the presentation for today's webinar.
Speaker Change: Thank you operator, and welcome everyone to Accenture <unk> first quarter 2024 financial results and business update conference call.
Speaker Change: The press release and 6K issued this morning, with our first quarter 2024 financial results and business update.
Speaker Change: These documents can be found on our website investors don't since you're the AI along with the presentation for today's webcast.
Chin Okeke: Before we begin, I'd like to remind you that we may make forward-looking statements on our call. These may include statements about our projected growth, revenue, business models, preclinical and clinical progress and results, and business activities and performance, as well as our anticipated cash runway. Actual results may differ materially from those indicated by these statements. Unless required by law, Exscientia does not undertake any obligation to update these statements for the future or to confirm these statements in relation to actual results.
Speaker Change: Before we begin I'd like to remind you that we may make forward looking statements on our call.
Speaker Change: These may include statements about <unk> projected growth revenue business models, preclinical and clinical progress and results and business activities and performance as well as our anticipated cash runway.
Speaker Change: Actual results may differ materially from those indicated by these statements.
Speaker Change: Unless required by law Accenture does not undertake any obligation to update these statements regarding the future or to confirm these statements in relation to actual results.
Chin Okeke: On today's call, I'm joined by Dr. Dave Hallett, Interim Chief Executive Officer and Chief Scientific Officer, and Ben Taylor, Chief Financial Officer and Chief Strategy Officer. And with that, I will now turn the call over to Dave.
Speaker Change: On today's call I'm joined by Dr. Dave Pallet.
Speaker Change: Interim Chief Executive Officer, and Chief Scientific Officer.
Speaker Change: And Ben Taylor, Chief Financial Officer, and Chief Strategy Officer.
David Hallett: And with that I will now turn the call over to Dave.
David Hallett: Thank you Chen.
David Hallett: While the first quarter of 2024 has been my first official year leading Exscientia, the turn of the year marked the beginning of my fifth year as a Senior Executive at the company. With this experience and perspective in mind, I firmly believe that 2024 will be a year of opportunity for Exscientia to continue making substantial progress on our mission to shift the curve of the pharmaceutical industry. The tangible benefits of our investment in platform and infrastructure are gaining pace.
David Hallett: While the first quarter of 'twenty 'twenty four is being my first officially leading accents yet.
David Hallett: Yeah, it's not the beginning of my fifth year as a senior executive at the company.
David Hallett: With this experience and perspective in mind I firmly believe that 2024 will be give opportunity for accenture to continue making substantial progress on our mission to shift the curve of the pharmaceutical industry.
David Hallett: The tangible benefits of our investments in platform and infrastructure are gaining pace.
David Hallett: When we at Exscientia refer to shifting the curve, we are referring to reducing the cost and timelines of contemporary drug discovery, design, and development while also increasing the probability of success. We have already demonstrated a repeated ability to lower the cost and time in the discovery phase of drug design projects. Our clinical pipeline has multiple shots on goal this year to start to improve upon the low probability of success historically seen by the wider industry. These include
David Hallett: But we at Accenture referred to shifting the curve, we are referring to reducing the cost and timelines of contemporary drug discovery design and development.
David Hallett: While also increasing the probability of success.
David Hallett: We have already demonstrated a repeated ability to lower the cost and time in the discovery phase of drug design projects.
David Hallett: Our clinical pipeline has multiple shots on goal this year to start to improve upon the low probability of success historically seen by the wider industry.
David Hallett: Our most advanced program, GTA-EXS617, or 617 for short, is a potential best-in-class CDK7 inhibitor. We expect to present top-line clinical data from the dose escalation phase of the ELUCIDATE Phase 1-2 study in the second half of this year. EXS 4318, or 4318, is a selective PKC Theta inhibitor designed by Exscientia and licensed by Bristol Myers Squibb for immunology and inflammation indications. 4318 has shown positive early results in its Phase 1 study and has the potential to be a first-in-class immunology drug, and two compounds designed for Sumitomo Pharma, which are currently in psychiatric disease that could read out this All these candidates were created by Exscientia because traditional methods had resulted in compounds with major developmental issues.
David Hallett: These include.
David Hallett: Our most advanced program GTA Exa 617, or 6174 shows a potential best in class CDK seven inhibitor.
David Hallett: We expect to present topline clinical data from the dose escalation phase of the elucidate phase one two study in the second half of this year.
Speaker Change: Yes exact 4318, all 4318, a selective PKC feature inhibitor designed by accident yet on in license by Bristol Myers Squibb for immunology and inflammation indications.
Speaker Change: All 318 has shown positive early results and its phase one study have the potential to be a first in class immunology Chuck.
Speaker Change: And two compounds designed for Sumitomo pharma, which are currently in psychiatric disease that could read out this year.
Speaker Change: All of these candidates with created by Accenture because traditional methods had resulted in compounds with major developmental issues.
David Hallett: Initial data from several programs will begin to demonstrate that our design solutions can significantly improve the probability of success in the clinic. Today we are providing updates for our highly differentiated LSD-1 inhibitor, EXS-74539, which continues its progression towards a Phase 1 clinical trial in acute myeloid leukemia patients, and, for the first time, announcing our plans for our MOLK1 inhibitor, EXS-73565 or 565, as a potential treatment for B-cell lymphomas, including chronic lymphocytic leukemia.
Speaker Change: Initial data from several programs will begin to demonstrate that our design solutions can significantly improve probability of success in the clinic.
Speaker Change: Today, we are providing updates for our highly differentiated LSD one inhibitor.
Speaker Change: 74539, or 539, which continues its progression towards a phase one clinical trial in acute myeloid leukemia patients.
Speaker Change: And for the first time announcing our plans Rama one inhibitor exs 73565, or 565 as a potential treatment for b cell lymphomas, including chronic lymphocytic leukemia.
David Hallett: We have built a platform with a focus on the efficient discovery, design, and development of highly differentiated small molecule compounds. Our first-of-its-kind automation lab, integrating our AI design capabilities with automated design-make-test loops, launched towards the middle of last year. We have already transitioned three programs over to the facility and will continue to add more during 2024. Prior to the opening of the lab, every compound we have designed was synthesized at a CRO or by our partners.
Speaker Change: We have built a platform with a focus on the efficient discovery design and development of highly differentiated small molecule compounds.
David Hallett: We have analyzed synthesis data from these legacy campaigns and believe that at least 75% of these multi-step compounds and 90% of the overall reaction types are automatable and could have been run through our facility. This is important as we aim to push through the logistical and time bottlenecks of working with third parties and reduce the CRO costs associated with these activities.
Speaker Change: A first of its kind automation lab integrating AI design capabilities with automated design make tests loops launch towards the middle of last year.
Speaker Change: We have already transitioned three programs over to the facility and will continue to add more during 2024.
Speaker Change: Prior to the opening of the lab every compound we have designed has been synthesized at Cerro or by our partners.
Speaker Change: We have analyzed synthesis data from these legacy campaigns and believe that's at least 75% of these multi step compounds are 90% of the overall reaction types are also made Seville and could have been run through our facility.
Speaker Change: This is important as we aim to push through the logistical and time bottlenecks of working with third parties and reduces ciara costs associated with these activities.
David Hallett: We are already starting to see an initial positive impact from the studio, with like-for-like biology resource requirements coming down by at least 75 percent and, in many cases, by more than 90 percent. We develop and optimize assays directly on the platform rather than through an intermediate step. We have started to run unattended overnight assays, are executing multiple assays on the same plate, and providing the teams with a great opportunity to collect data.
Speaker Change: We are already starting to see an initial positive impact from the studio with like for like biology resource requirements coming down by at least 75% and in many cases by more than 90%.
Speaker Change: We developed and optimized assays directly on the platform Rob had done through an intermediate step.
Speaker Change: We have started to run unattended overnight assays.
Speaker Change: Executing multiple assay on the same plate I'm, providing the teams with greater opportunity to collect data.
David Hallett: The active learning-driven nature of our entire approach, from AI drug design through automation and across the entire experimentation cycle, means we can accelerate the discovery process even further than before and in a more cost-effective manner for Exscientia. We are seeing operational efficiencies from the multi-year investment in our integrated platform. With these developments in mind, we are continuing to shape our business around the automation of the design, make, test, learn loop and ramping up activity through the automation lab. Our laser focus on this process creates the necessity to scale back or discontinue legacy activities that are not directly aligned with our core transformative purpose.
Speaker Change: The active learning driven nature of our entire approach from a agile design through automation and across the entire experimentation cycle means we can accelerate the discovery process, even further than before and in a more cost effective manner for accenture.
Speaker Change: We are seeing operational efficiencies from the multiyear investments into our integrated platform.
Speaker Change: With these developments in mind, we are continuing to shape our business around the automation of the design make test learn loop and <unk>.
Speaker Change: Ramping up activity through the automated lab.
Speaker Change: Our laser focus on this process creates the necessity to scale back or discontinue legacy activities that are not directly aligned with our core transformative purpose.
David Hallett: Automation, Advancing Our Design Platform, Pipeline Development, and Partnerships. As part of this process, we intend to anchor our precision medicine capabilities on those aspects that directly influence our pipeline or contribute to our discovery and translational activities. As a result of this sharpened operational emphasis, we expect to make a total reduction in headcount of somewhere between 20 and 25% of global staff, including reduced activities at our Vienna site.
Speaker Change: <unk> advancing our design platform pipeline development and partnerships.
Speaker Change: As part of this process, we intend to anchor our precision medicine capabilities on those aspects that directly influence our pipeline all contribute to our discovery and translational activities.
Speaker Change: As a result of the sharpened operational emphasis we expect to make a total reduction in head count somewhere between 20, and 25% of global stuff, including reduced activities at our Vienna sites.
David Hallett: These changes will result in at least $40 million of annualized savings beginning in 2025. These changes are the natural progression for a technologically driven company and reflect our deep-rooted commitment to efficiency, not only with respect to what we do but critically how we execute and deliver it. Importantly, this step reaffirms our commitment to the key value drivers of our business, including our pipeline, our partnerships, and our drug design and automation capability.
Speaker Change: These changes will result in at least $40 million of annualized savings beginning in 2025.
Speaker Change: These changes are the natural progression for our technologically driven company and reflects our deep rooted commitment to efficiency.
Speaker Change: Not only with respect to what we do but critically how we execute and deliver it.
Speaker Change: Importantly, the step reaffirms our commitment to the key value drivers of our business.
Our pipeline our partnerships, an agile design and automation capabilities.
David Hallett: As I have already mentioned, we will share a few key updates across our pipeline as we look to build long-term value for our business, starting with 539, our LSD1 inhibitor. As a reminder, we believe that in 5.3.9, we have designed the first LSD-1 inhibitor that uniquely combines a reversible mechanism of action with an appropriate half-life and CNS penetration. CNS penetration is an important property because it has the potential to address brain metastases, which are prevalent in advanced disease.
Speaker Change: As I have already mentioned, we will share a few key updates across our pipeline as we look to build long term value for our business.
David Hallett: We believe that having a reversible mechanism of action is important because irreversibly deactivating LSD-1 can contribute to poor control of platelet levels. Having a long half-life has the potential to have the same effect, and so the pharmacokinetic properties of the compound are also important. We have previously demonstrated in rodent studies that playlet levels are able to recover even with super efficacious doses of 539, whereas they remain depleted even for intermittently dosed irreversible LSD-1 inhibitors.
Speaker Change: Talking with 539, our LSD one inhibitor.
Speaker Change: As a reminder, we believe that in 539, we have designed the first LSD one inhibitor that uniquely combines a reversible mechanism of action with an appropriate half life in CNS penetration.
Speaker Change: CNS penetration is an important property because he has the potential to address brain metastases, which are prevalent in advanced disease.
Speaker Change: We believe that having a reversible mechanism of action is important because every versus simply deactivating LSD, one can contribute to poor control of platelet levels.
Speaker Change: Having a long half life has the potential to have the same effect and so the pharmacokinetic properties of the compound are also important.
We have previously demonstrated in rodent studies that platelet levels are able to recover even with super efficacious doses of 539, whereas they remain depleted even for intermittently dose irreversible <unk> inhibitors.
David Hallett: This unique combination of properties offers 539 best-in-class potential. The stoplight chart on this slide is color coded to show how close a profile compound is to an optimized target product profile. Green represents no deviation from the ideal property range; Amber, a minor deviation; and red, a major deviation.
This unique combination of properties offered 539 best in class potential.
Speaker Change: The Stoplight chart on this slide is color coded to show how close a profile compound is to an optimized target product profile.
Speaker Change: Green represents no deviation from the ideal property range Amber Amanda deviation and read a major deviation.
David Hallett: The column on the right-hand side represents 539, which is green for all profile properties. The first two columns represent two LSD-1 inhibitors developed by other companies. Both compounds have major deviations, both have long human half-lives, and neither are CNS penetrant. Phase 1-2 compound also irreversibly deactivates the enzyme, compounding the long half-life and presenting a challenge to managing platelet levels. What is interesting is that despite these deviations, the phase 1-2 compound has been able to achieve proof of concept in an AML study, achieving complete responses in 33% of patients. On the face of it, this is a good result.
Speaker Change: The column on the right hand side represents 539, which is green for all profile properties.
Speaker Change: The first two columns represent two LSD one inhibitors developed by other companies.
Speaker Change: Both compounds have major deviations both have long human half lives are neither a CNS penetrant.
Speaker Change: The phase one two compounds also irreversibly deactivate the enzyme compounding the long half life and presenting a challenge to managing platelet levels.
Speaker Change: What is interesting is that despite these deviations the phase once you compound has been able to achieve proof of concept and in AML study achieving complete responses in 33% of patients.
Speaker Change: On the face of it this is a good result.
David Hallett: However, it should be noted that to achieve this, patients had to be dosed intermittently, and even then, high rates of grade 3 and 4 platelet count decreases were seen. We have previously shown data that demonstrates 539's preclinical efficacy is comparable to this compound. If this activity translates into the clinic, 539 has the potential to be just as efficacious, but with a better safety profile. With this in mind, we plan to submit an IND to support a Phase 1-2 trial in AML in the third quarter of this year, with the aim of opening the first clinical trial site by the end of 2024.
Speaker Change: However, it should be noted that to achieve this patients had to be dosed intermittently and even then high rates of grade three and fault platelet count decreases was seen.
Speaker Change: We have previously shown data that demonstrates five three nice preclinical efficacy is comparable to this compound.
Speaker Change: If this activity translates into the clinic 539 has the potential to be just as efficacious, but with a better safety profile.
Speaker Change: With this in mind, we plan to submit an IND to support a phase one two trial in AML in the third quarter of this year with the aim of opening the first clinical trial site across the end of 2024.
David Hallett: We retain an interest in the development of 539 for solid tumors, including small cell lung cancer. By entering AML first, we are de-risking our program where clinical proof of concept has already been established. We believe we can leverage what we learn from this regulatory process for future opportunities for 539 and other indications. This Phase 1-2 trial will initially have a monotherapy dose escalation phase to help us identify the appropriate dose for testing, followed by a seamless phase 2 dose expansion to assess safety and efficacy at that dose.
Speaker Change: We retained an interest in the development of <unk>, three nine for solid tumors, including small cell lung cancer.
Speaker Change: By entering AML first we are Derisking, a program where clinical proof of concept has already been established.
We believe we can leverage what we learned from this regulatory process for future opportunities for five 390 and other indications.
Speaker Change: This phase one two trial will initially have a monotherapy dose escalation phase to help us identify the appropriate dose for testing.
Speaker Change: Followed by a seamless phase II dose expansion to assess safety and efficacy at that dose.
David Hallett: Throughout this, we will continue to pursue our precision medicine approach to help support with biomarker selection and patient response prediction. In addition to 539, I'm also going to provide updates on 565, our Malt 1 inhibitor. 565 has been precision designed to be highly selective, including for the enzyme UGT1A1. UGT1A1 mediates bilirubin glucuronidation, and inhibition contributes to hyperbilirubinemia. High's Law is an assessment of high fatality risk from drug-induced liver injury that is based on elevated levels of liver enzymes and total bilirubin in the absence of other factors, for example, viral hepatitis or alcohol abuse.
Speaker Change: Throughout this we will continue to pursue a precision medicine approach to help support with biomarker selection and patient response prediction.
Speaker Change: In addition to 539 I'm also going to provide updates about 565 <unk> one inhibitor.
Speaker Change: 565 has been precision designed to be highly selective including over the enzyme UGC one a one.
<unk> won a one <unk> bilirubin blucher validation and inhibition contributes to hyperbilirubinemia.
Speaker Change: Highs law is an assessment of high fatality risks from drug induced liver injury that is based on elevated levels of liver enzymes and total bilirubin in the absence of the faxes for example, viral hepatitis or alcohol abuse.
David Hallett: Many of the current standard of care treatment options that could be used in rational combination with a malt one inhibitor such as BTK inhibitors are known to cause drug-induced liver injury with concomitant elevations of liver enzymes. This would make combination with BTK inhibitors difficult in practice for those malt water inhibitors that do not share 5,6,5 selectivity profile. We previously shared data at ESMO late last year showing in vivo activity of 5,6,5 as monotherapy and in combination. Combinations with butanib demonstrated tumor growth regression in animal models.
Speaker Change: Many of the current standard of care treatment options that could be used in rational combination with a mobile inhibitor such as PTK inhibitors are known to cause drug induced liver injury with concomitant elevations of liver enzymes.
Speaker Change: This would make combination with <unk> inhibitor is difficult in practice for those mold inhibitors that do not share 565 selectivity profile.
Speaker Change: We previously shared data at ESMO late last year, showing in vivo activity of 565, as a monotherapy and in combination the.
Speaker Change: The combinations with Ibrutinib demonstrated Jim Mcgruff regression in animal models.
David Hallett: We have also recently generated compelling data in-house for combinations with next-generation BTK inhibitors, which we look forward to sharing at a medical meeting later this year. 565 is currently progressing through IND-enabling studies, and we plan to launch a clinical trial for patients with B-cell lymphomas, including chronic lymphocytic leukemia, in early 2025. It has been demonstrated from preclinical data that there are synergies between MOT1 inhibition and current standard of care treatment options.
Speaker Change: We have also recently generated compelling data in house for combinations with next generation Beachy Cabotage, which we look forward to sharing at a medical meeting later this year.
Speaker Change: 565 is currently progressing through IND, enabling studies and we plan to launch a clinical trial for patients with B cell lymphomas, including chronic lymphocytic leukemia in early 2025.
Speaker Change: It has been demonstrated from preclinical data that there are synergies between <unk> inhibition and current standard of care treatment options.
David Hallett: It has even been demonstrated that MOLT1 combinations have the potential to overcome standard of care treatment resistance for some B-cell lymphomas. As you can see from the slide, there are approximately 22,000 B-cell lymphoma patients who fall into the second line of treatment each year. Our clinical development strategy will lay the groundwork for our ultimate goal of using 565 in combination with current standard of care treatment options. We will take the first step towards this by submitting either an IND or CTA application before the end of this year. I will now hand over to Ben to walk us through the business and financial update.
Speaker Change: It's even been demonstrated that malte won't combinations have the potential to overcome standard of care treatment resistant, but some b cell lymphomas.
Speaker Change: As you can see from this slide that are approximately 22000, b cell lymphoma patients who fall into the second line of treatment each year.
Speaker Change: Our clinical development strategy will lay the groundwork for our ultimate goal of using 565 in combination with current standard of care treatment options.
We will take the first step towards this by submitting either and IMT, our Cta application before the end of this year.
Pen: I will now hand over to pen to walk us through the business and financial updates.
Speaker Change: Thank you Dave.
Ben R. Taylor: Partnerships have been and will continue to be an important part of our business model. We have brought in almost $230 million from partnerships over the last few years and expect to generate significant additional near-term cash inflows.
Speaker Change: Partnerships have been and will continue to be an important part of our business model.
Pen: We have brought in almost $230 million from partnerships over the last few years and expect to generate significant additional near term cash inflows.
Ben R. Taylor: Our Sanofi collaboration is showing strong progress across multiple programs, and the Merck-KGAA collaboration now has all of the programs in early discovery. Drug discovery and early development are under pressure across the industry, and we believe Exscientia has the ideal solution. One of the main industry problems is that approximately 50% of drugs fail in phase one, and these failures are usually tied to safety and dosage.
Speaker Change: Our Sanofi collaboration and showing strong progress across multiple programs and the Merck K G. A collaboration now has all of the programs in early discovery.
Speaker Change: Drug discovery and early development are under pressure across the industry and we believe <unk> has the ideal solution.
Speaker Change: One of the main industry problems is that approximately 50% of drugs fail in phase one.
Speaker Change: These failures are usually tied to safety and dosing.
Ben R. Taylor: These are two areas where the Exscientia platform excels beyond traditional methods. In addition, the integration of our AI-based design platform and our automation lab can enable a new level of speed and cost efficiency. The impact we create is being demonstrated by our PKC Theta inhibitor that is partnered with BMS. It recently achieved positive early results in its phase one study and has the potential to be a first-in-class immunology drug. PKC Theta is a target where, over the last 15 years, more than a dozen biopharmaceutical companies have tried and failed to create a potent and selective inhibitor using traditional design methods.
Speaker Change: These are two areas, where the accident here platform excels beyond traditional methods.
Speaker Change: In addition, the integration of our AI based design and our automation lab can enable a new level of speed and cost efficiency.
Okay.
Speaker Change: The impact we create is being demonstrated by our PKC theater inhibitor that is partnered with BMS.
Speaker Change: It recently achieved positive early results in its phase one study and has the potential to be a first in class immunology drug.
Speaker Change: PKC theater is a target where over the last 15 years more than it does in Biopharma companies have tried and failed to create a potent and selective inhibitor using traditional design methods.
Ben R. Taylor: We were able to move from design initiation to identifying the development candidate in less than 12 months, delivering a better quality drug with balanced properties faster. I will now take a minute to close with highlights from our financial results. Full results are detailed in our press release in Form 6K. I will review the results in U.S. dollars using the constant currency rate of 1.26 to the pound.
Speaker Change: We were able to move from design initiation to identifying the development candidate in the less than 12 months, delivering a better quality drug with balanced properties faster.
Speaker Change: I will now take a minute close with highlights from our financial results.
Speaker Change: Full results are detailed in our press release and form 6K.
Speaker Change: I will review the results in U S dollars using the constant currency rate of 1.26 to the pilot.
Ben R. Taylor: We ended the quarter with $417 million in cash, providing us with a cash runway well into 2027 without additional business development. This enables us to deliver on a multitude of pipeline and platform milestones during that time. You can see the impact of our improving efficiencies and disciplined spending through the 29% decrease in operating cash burn from $55 million in the first quarter of last year to $39 million in the first quarter of 2024.
Speaker Change: We ended the quarter with $417 million in cash providing us with a cash runway well into 2027 without additional business development.
This enables us to deliver on a multitude of pipeline and platform milestones during that time.
Speaker Change: You can see the impact of our improving efficiencies and disciplined spending through the 29% decrease in operating cash burn from $55 million in the first quarter of last year to 39 million in the first quarter of 2024.
Ben R. Taylor: We did this while moving CDK7 forward in the clinic, bringing two new drugs into IND-PREP, executing on our partnerships, launching our automation lab, and setting the standard for small molecule design technology. Today, we have evolved our business again to recognize the benefits of technological efficiency, and in doing so, expect to realize annual cash savings from 2025 onwards of more than $40 million. We have a strong track record of delivering business development, and that has supported us since our IPO. We are focused on achieving those pipeline and collaboration milestones that will validate the substantial leadership position we have built with our platform. And with that, I will turn it back over to Dave.
Speaker Change: We did this while moving CDK seven for it in the clinic, bringing two new drugs into IMD prep executing on our partnerships launching our automation lab and setting the standard for small molecule design technology.
Speaker Change: Today, we have evolved our business again to recognize the benefits of technological efficiency and in doing so expect to realize annual cash savings from 2025 onwards of more than $40 million.
Speaker Change: We have a strong track record of delivering business development and that has supported us since our IPO.
Speaker Change: We are focused on achieving those pipeline in collaboration milestones that will validate the substantial leadership position, we have built with our platform.
Speaker Change: And with that I will turn it back over to Dave.
David Hallett: Thank you Ben.
David Hallett: Our foundational work leveraging AI-driven precision drug design has culminated in the development of a focused high-value oncology pipeline, which we believe has the potential to dramatically improve patient outcomes. We expect to be providing data this year from at least one program, namely CDK7. Our platform that drives both the pipeline and partnerships is working, and we believe the integration of automation has the potential to drive extraordinary efficiencies through our business. The changes we announce today result in annualized savings of $40 million from 2025 and beyond.
David Hallett: Our foundational work leveraging AI driven precision show design has culminated in the development of our focused high value oncology pipeline, which.
David Hallett: Which we believe has the potential to dramatically improve patient outcomes.
David Hallett: We expect to be providing data this year from at least one program, namely CDK seven.
David Hallett: A platform that drives both the pipeline and partnerships is working and we believe with the integration of automation has the potential to drive extra ordinary efficiencies through our business.
David Hallett: The changes we announced today result in annualized savings of $40 million from 2025 and beyond.
David Hallett: These changes will help us achieve our medium to long-term goals, which are delivering efficacy data for our current clinical programs, CDK7, LSD1, MALT1, and PKC Theta, delivering hundreds of millions of dollars in milestones from our partnership, advancing the next generation of automation-supported projects into the clinic, and quantifiably demonstrating the full use case of integrating generative AI with automated experimentation. We believe this will cement our position as the leader in technology-driven drug design. And with that, we will open the call for questions and answers.
David Hallett: These changes will help us achieve our medium to long term goals.
David Hallett: These are delivering.
David Hallett: Delivering efficacy data for our current clinical programs CDK seven LSD, one mulch, one and PK data.
David Hallett: Delivering hundreds of millions of dollars in milestones from our partnerships.
David Hallett: Advancing the next generation of automation supported projects into the clinic.
David Hallett: And quantifiably demonstrating the full use case of integrating generative AI with automated experimentation.
David Hallett: We believe this will cement our position as the leader in technology driven trial design.
David Hallett: And with that we will open the call for questions and answers.
Sara Sherman: Thank you. The floor is now open to questions. If you would like to ask a question, please press star 1 on your telephone keypad. If you wish to withdraw your question, simply press star 1 again. Your first question comes from the line of Alec Stranahan with Bank of America. Your line is open.
Thank you the floor is now open for questions. If you would like to ask a question. Please press star one on your telephone keypad. If you wish to withdraw your question simply press Star one again.
Speaker Change: Your first question comes from the line of Alec Stranahan with Bank of America. Your line is open.
Alec Warren Stranahan: Hey guys, thanks for taking our questions; just a couple from us. First, for CDK7, how should we be thinking about activity with mono versus combos here? And anything in terms of safety profiles you'd like to see in terms of gauging combinability? And given the announced cost reductions, how are you balancing executing on your partnerships while driving your pipeline forward? Any color around the balance of efforts here would be great. Thanks.
Alec Warren Stranahan: Hey, guys. Thanks for taking our questions just a couple from us.
Alec Warren Stranahan: First for Sydney case, seven how should we be thinking about activity with mono versus combo here and anything in terms of safety profile you'd like to see in terms of gauging.
Alec Warren Stranahan: <unk> ability.
Speaker Change: And you know given the announced cost reductions how are you balancing executing on your partnerships, while driving your pipeline forward any.
Speaker Change: Any color around the balance of effort here would be great. Thanks.
David Hallett: Thank you for that question, or questions. I'll let Ben take the first question, which is about CDK7, and then I'll follow on with that with your question around the balance of the pipeline and partnerships. OK.
Speaker Change: Thank you for that question and all questions.
Speaker Change: Well I'll, let Dan take the first question was about <unk> seven.
Speaker Change: And then I'll I'll follow on with that with your question around.
Speaker Change: The balance of the pipe unimportant ships.
Ben R. Taylor: Hey Alec, thanks for the question. So, CDK7, we would expect to see some level of monotherapy activity because this is both a cytostatic and a cytotoxic mechanism. However, in clinical use, it will almost certainly always be used in combination. And so what we're looking at right now, and we'll have more on this in the near future, is what's the right next step. So it's in monotherapy dose escalation, and that'll be the data that is coming out later this year.
Alex: Hey, Alex.
Dan: Thanks for the questions. So CDK seven we would expect to see some level of monotherapy activity.
Dan: This is both a set of aesthetic and a cytotoxic mechanism.
Dan: However in clinical use it will almost certainly always be used in combination.
Ben R. Taylor: And then we'll look at the appropriate combination to put that into for probably a brief escalation and then an expansion into that area. We've seen some good track records with CDK7, CDK4s, and other CDKs that have been out in the clinic. And I think we feel really good about our profile. The critical issue that you really have to manage with CDK7 is toxicity. GI toxicities will definitely be a big part of it. You both lose patients as well as have variable absorption if you do have GI toxicities.
Dan: So what we're looking at right now and we'll have more on this in the near future is what's the right next steps. So it's in a monotherapy dose escalation and that'll be the data that is coming out later on this year.
Dan: And then we'll look at the appropriate combination.
Dan: To put that into for probably a brief.
Dan: Escalation and then an expansion into that area. We've seen some good track record of CDK seven CDK four as other CDK is.
Dan: That have been out in the clinic and I think we feel really good about our profile. The critical issue that you really have to manage with CDK seven S toxicity.
Dan: The I tax will definitely be a big part of it you both lose patients as well as have variable absorption. If you do have Gi toxicities.
Dan: So that's something that I would definitely be focused on.
Ben R. Taylor: And so that's something that I would definitely be focused on. But we, if you remember the profile of our inhibitor, it was specially designed to have gotten around an issue that a number of other competitive molecules have, which is being a transporter substrate. So we think we've got a really nice advantage in there. And hopefully, you'll be able to see that in the data, because if we can get a nice, safe profile, this is a mechanism that clearly should work. And there are a number of different combination opportunities for us.
Dan: But we if you remember the profile of our <unk> inhibitor it.
Dan: Especially designed to have a.
Dan: To get around an issue that a number of the other competitive molecules have.
Dan: Which is being a transporter substrates. So we think we've got a really nice advantage in there and hopefully you'll be able to see that in the data.
Dan: Because if we can get a nice safe profile. This is a mechanism that clearly should work.
Dan: And there's a number of different combination opportunities for it.
David Hallett: Thank you, Ben. Part two of your question. Partnerships will remain a cornerstone of our business, and the reasons that Ben highlighted are one of those.
Speaker Change: Thank you Ben.
Speaker Change: Part two of your question.
Speaker Change: Partnerships will remain a cornerstone of our business.
Speaker Change: The reasons that Ben highlights one of those day.
David Hallett: They've brought substantial cash inflows into the organization. As I mentioned in my remarks, the potential for the current collaborations over the next two to three years is to bring in hundreds of millions of dollars in potential milestones. More importantly, or just as importantly, they allow us an opportunity for our platform to learn and to kind of leverage the capacity that we've created. The SNOFIE partnership, for example, has made great progress in the last couple of quarters.
Speaker Change: They've brought substantial cash inflows into the organization.
Speaker Change: As I mentioned in my remarks is that the potential for the current collaborations over the next two to three years is to bring in hundreds of millions of dollars of potential milestones.
Speaker Change: More importantly, or just as importantly, they they allow us an opportunity for a platform to learn and seeking to leverage the capacity that we've created.
Speaker Change: The Snuffy partnership for example.
Speaker Change: It is also making kind of great progress.
Speaker Change: And the last couple of quarters now we've not only announced the addition of a new program with enhanced economics as started out life with an accenture.
David Hallett: We've not only announced the addition of a new program with enhanced economics that started out, Life with Exscientia, but more recently the first kind of discovery stage milestone from that collaboration. The new collaborations are also benefiting from the utility of our automation platform. So, whether it be BMS, or Merck, or Sanofi, or Gates, or Raleigh Bio, all our partnerships are important.
Speaker Change: But more recently the first kind of discovery stage milestone from that collaboration.
Speaker Change: That kind of new collaborations are also benefiting from.
Speaker Change: The utility of our automation platform.
Speaker Change: So.
Speaker Change: Whether it be BMS, all Merck, Sanofi or gates or rally bio.
Speaker Change: All of our partnerships are important to us.
Alec Warren Stranahan: Great, that's very helpful. Thank you.
Speaker Change: Great. That's very helpful. Thank you.
Vikram Purohit: Your next question comes from the line of Vikram Purohit with Morgan Stanley. Your line is open.
Speaker Change: Your next question comes from the line of Vikram <unk> with Morgan Stanley. Your line is open.
Vikram Purohit: Hi, good morning. Thanks for taking our questions. We had two, one on partnerships and one on the pipeline. So revisiting the topic of partnerships, could you speak a bit about how you're kind of thinking about and parsing through opportunities for biopharma partnerships versus more tech-focused partnerships and how your appetite for each of those could evolve throughout the year and what you'd be looking for from each different type of partnership.
Speaker Change: Hi, good morning, Thanks for taking my question.
Speaker Change: We had two one on partnerships and one on the pipeline.
Speaker Change: So revisiting the topic of partnerships could you speak a bit about how you are.
Speaker Change: Kind of thinking about and parsing through opportunities.
Speaker Change: Our biopharma partnerships versus.
More tech focused partnerships.
Speaker Change: Kind of how your appetite for for each of those could evolve throughout throughout the year and what you'd be looking for from each different type of partnership.
Vikram Purohit: And secondly, on the pipeline, you mentioned in your prepared remarks that the PKC data, initial data has been promising. Just wondering if you could share a bit more about what you've learned with that compound and what the next public-facing communications on that program could look like. Thank you.
Speaker Change: Secondly on the pipeline you mentioned in your prepared remarks that the PK data data.
Initial data has been promising just wondering if you could share a bit more about what you've learned with that compound and what the next <unk>.
Speaker Change: <unk> facing.
Speaker Change: Communications on that program could look like thank you.
David Hallett: Hi Vikram. Let me start with your second part first, if that's okay.
Speaker Change: Hi, Vikram let.
Vikram: Let me start of your second part first if that's okay.
David Hallett: I am immensely kind of proud of the progress that PKC Theatres has made, but this has been a very challenging project over the course of the last, probably the last decade. I estimate that more than 10 companies have tried and failed to try and bring an already-available, selective, potent inhibitor into the clinic, and they pretty much all failed to do that. So this is, I think this is proof of the first evidence of what we've spoken about for many quarters now, about the capabilities of our design platform to deliver where others have failed.
Speaker Change: Immensely kind of proud of the progress that PKC thesis is.
Speaker Change: <unk> made.
Speaker Change: This has been a very challenging projects over of.
Speaker Change: The course of the last kind of like probably last decades.
Speaker Change: I estimate that kind of more of the tech companies have tried and failed to try and bring in already by available selective potent inhibitor into the clinic.
Speaker Change: And are they pretty much all fail to do that.
So this is I think this is proof of all of the first evidence of what we've spoken about for many quarters now.
Speaker Change: About the capabilities of our design platform to deliver where others have failed.
David Hallett: PKC Theta remains within the BMS portfolio. It has progressed through phase one. We can't say any more at this stage, but we are working with BMS to be able to tell you more in the coming quarters. In terms of partnerships, it's that we continue to look for both. [inaudible] target-based partnerships, whether they be the kinds of collaborations that we've done historically with Sanofi, for example. But I think what the automation platform is allowing us to do, in terms of efficiencies and the kind of changing cost base, is also to potentially attract early-stage collaborators like biotechs or even startups.
Because he theta and remains within the BMS portfolio.
Speaker Change: It is it has progressed through three phase one we can't say anymore at this stage, but we are working with <unk> about to tell you more.
Speaker Change: The coming quarters.
Speaker Change: In terms of partnerships.
Is that.
Speaker Change: We continue to look for both.
Speaker Change: Target kind of base kind of partnerships, whether they be the.
Speaker Change: Kind of collaborations that we've done historically with Sanofi for example.
Speaker Change: But I think what the automation platform is allowing us to do in terms of the efficiencies and the kind of changing cost base.
Speaker Change: It also to potentially attract.
Speaker Change: Kind of early stage kind of collaborators like biotechs.
Speaker Change: Biotechs are even even startups. So that's kind of one area of the business development conversations are taking place in a moment.
David Hallett: So that's one area where business development conversations are taking place at the moment. In terms of technology, the conversations that we have and continue to have with the major technology players are really about the excitement we're generating in terms of the investment we've made into our automation studio. I think a lot of people that have been fortunate enough to visit that site have recognized the potential and the value of actually bringing together the computational world with the real world of engineering and that closed-loop test environment.
Speaker Change: In terms of technology.
Speaker Change: The conversations that.
We have and continue to have with the major technology players.
Speaker Change: I really about the excitement we generating in terms of the investment we've made in some of our automation studio.
Speaker Change: I think a lot of a lot of people.
Speaker Change: <unk> been fortunate enough to visit that sites are recognized.
Speaker Change: The the potential and the volume of actually bringing together the kind of the computation of world with the real world of kind of engineering and that closed loop test environment.
David Hallett: So the kind of conversations that we're having with technology partners are really around how best they can help us support that going forward. So we will update you, of course, kind of over the course of the next couple of quarters. But I'm confident that we'll see progress on both aspects of our business in that regard.
Speaker Change: So the kind of the kind of conversations that we're having with kind of technology partners are really around how better how best can they help us support that going forward.
Speaker Change: So we will update you as all of costs kind of over the course of the next couple of quarters.
Speaker Change: Im confident we will see progress on both aspects of our business in that regard.
Speaker Change: Understood. Thank you.
Peter Richard Lawson: Your next question comes from the line of Peter Lawson with Barclays. Your line is open.
Speaker Change: Your next question comes from the line of Peter Lawson with Barclays. Your line is open.
Peter Richard Lawson: Great, thanks so much. I guess initially it was just a question around CDK7, the kind of combination agent you're thinking of using, and the initial data sets and what indications we should be thinking about.
Speaker Change: Great. Thanks, so much.
Speaker Change: Yes.
Peter Richard Lawson: Just a question on CDK <unk> inhibitor <unk>.
Speaker Change: Combination agent you're thinking of using.
Speaker Change: And the <unk>.
Speaker Change: There is some dataset what indications we should be thinking about.
Ben R. Taylor: Thank you, Peter. I'll pass that question over to Ben. Sure.
Speaker Change: Thank you Peter I'll pass that question over to Ben sure.
Ben R. Taylor: Sure, so we still have some flexibility, but I'll give you a few ideas of where we could go with this because I think there are some really interesting avenues. The most common path here would be to go after ER-positive, HER2-negative, CDK4-6 refractory breast cancer patients. And that may seem like a tough patient population for CDK inhibitors, but actually, we've seen some positive early data out of Pfizer's CDK4, showing that even if you're going after CDK4, after 4, 6, you can have good positive responses, as well as some early signs out of CDK7s.
Ben R. Taylor: So we still have some flexibility, but I'll give you a few ideas of where we could go with it because I think there are some really interesting avenues.
The most common paths here would be to go after year positive her two negative CDK four six refractory breast cancer patients.
Ben R. Taylor: And that may seem like a tough patient population for CDK inhibitors.
Ben R. Taylor: But actually we've seen some positive early data out of Pfizer CDK four showing that even if youre going after CDK four after four six you can you can have good positive responses as well as some tumor early signs out of CDK Sevens I think we just have a lot better over.
Ben R. Taylor: I think we just have a much better overall balanced profile than the inhibitors that are out there on the market. And as we've talked about before, we think that CDK7 is a class and could really have some advantages over some of the other CDKs. So I think we will be able to obviously explore that area if we want to.
Ben R. Taylor: They're all balanced profile than the inhibitors that are out there on the market and as we've talked about before we think the CDK seven is a class.
Ben R. Taylor: Could really have some advantages over some of the other CDK. So I think we will be able to obviously explore that area. If we wanted to but because of our safety profile that also opens up some other areas.
Ben R. Taylor: But because of our safety profile, that also opens up some other areas. There's a lot of great preclinical data showing that CDK7 can be beneficial with immunotherapies. And that has often not been pursued, or the clinical trials haven't been very successful because of toxicity. And part of the reason might be that they have very different toxicity profiles. And so when you put them together, you can get an overwhelming tax burden. But if we're able to manage that CDK7 toxicity better, there should be very complementary activity.
Ben R. Taylor: Theres a lot of great preclinical data showing that CDK seven can be beneficial with.
Ben R. Taylor: Immunotherapies.
Ben R. Taylor: And that is often not been pursued or their clinical trials haven't been very successful because of toxicity.
Ben R. Taylor: And part of the reason there might be they have very different toxicity profiles and so you put them together.
Ben R. Taylor: Can get.
Ben R. Taylor: Overwhelming tax burden, but if we're able to manage that CDK seven toxicity better.
Ben R. Taylor: There should be very complimentary activity so that.
Ben R. Taylor: So that's another example of how our profile and what we're able to do with our platform could open up markets that other drugs aren't able to reach. So there are a number of different places that you could go with CDK7 because it is a more fundamental mechanism, but that gives you an example of what we're thinking about.
Ben R. Taylor: That's another example of how <unk>.
Ben R. Taylor: Our profile and what we're able to do with our platform actually could open up markets that other.
Ben R. Taylor: Other drugs aren't able to reach so.
Ben R. Taylor: There's a number of different places that you could go with CDK seven because it is a more fundamental mechanism, but that gives you. An example of what we're thinking about.
Ben R. Taylor: Gotcha. Thank you. And then combination agents for CDK7. So immunotherapy, I guess, is one potential treatment. Yes.
Speaker Change: Got you. Thank you.
Speaker Change: Combination agents CDC TDK city.
Speaker Change: In the third quarter.
Speaker Change: Potentially yes.
Ben R. Taylor: Yeah, so it'll really depend on where you go. So if you went with ER-positive, HER2-negative, CDK4-6-resistant breast cancer, you'd probably be with a CERD. Fulvestrin is obviously a pretty common standard of care there. If you went after something like a lung cancer indication, you might go with PD-L1. There are obviously other indications you could go after, and it really depends on the standard of care. I think we would need to start around the second line in most indications. That could give you a good sense of direction.
Speaker Change: Yes, so it will really depend on where you go. So if you went with that ER positive <unk> negative CDK four six resistant.
Speaker Change: Breast cancers, you'd probably be with a surge.
Speaker Change: For Investor and this obviously is a pretty common standard of care there.
Speaker Change: If you went after something like a lung cancer.
Indication.
Speaker Change: You May go with a PDL one.
Speaker Change: There are obviously other indications you could go after and it really depends on the standard of care I think.
Speaker Change: We would need to start around the second line in.
Speaker Change: In most indications.
Speaker Change: But that could give you a good sense.
Ben R. Taylor: Thank you. And then any guidance around cash-bound expectations for Q2 and how that kind of measures out for financial year 24?
Speaker Change: Thank you and then any guidance around cash burn expectations for <unk>.
Speaker Change: Q2, and how that kind of.
Speaker Change: Measures.
Speaker Change: Financial year 2012.
Ben R. Taylor: Sure, I'll keep going on that one. So obviously, you know, hopefully it was noticed that we had a 29% decrease year-over-year despite a lot of execution. In our first quarter results, I think we intend to continue that into the year. The cash burn, the operational cash burn this year will be less than last year. And we're still holding to that.
Speaker Change: Sure.
Speaker Change: Keep going on that one.
Speaker Change: So obviously.
Speaker Change: Hopefully it was noticed we had a 29% decrease year over year, despite a lot of execution.
Speaker Change: And our first quarter results I think we intend to continue that into the year, our guidance had been the cash burn.
Speaker Change: The operational cash burn this year will be less than last year.
Ben R. Taylor: I think with what we announced today, that puts our cash runway well into 2027. You may remember our previous guidance was well into 2026. That's actually a really important 12-month period, not only because it gives us more control over our own destiny, which is always a good thing, but that also means that we have the ability, without additional BD or financing, to get through things like CDK7 Phase 2 data and or initial Phase 1 data on LSD1 and or MOLT1.
Speaker Change: And we're still holding to that I think with.
Speaker Change: What we announced today.
Speaker Change: Puts our cash runway well into 2027 you.
Speaker Change: You may remember our previous guidance was well into 2026, that's actually a really important 12 month period, not only because it gives us a.
Speaker Change: More control over our own destiny, which is always a good thing, but that also means that we have the ability without additional BD or financing to get through things like CDK seven phase II data.
Speaker Change: Andrew or.
Speaker Change: Initial phase one data on <unk>.
Ben R. Taylor: Plus, there's a lot that should happen in our partnered pipeline over that time period, and obviously, we'd get to see the automation really play out well. So, there's a lot going on over the next couple of years, and we wanted to make sure that we were in full control over that time period.
Speaker Change: Plus there's a lot there.
Speaker Change: Should happen in our partnered.
Speaker Change: Pipeline over that time period, and obviously, we'd get to see the automation really play out well. So there's a lot going on over the next couple of years and we wanted to make sure that we were in full control over that time period.
Peter Richard Lawson: Great. Thank you so much. Once again, ladies.
Speaker Change: Great. Thanks, so much.
David Hallett: Once again, ladies and gentlemen, if you have a question, it is star one on your telephone keypad. There are no further questions at this time. I will turn the call over to Dave Hallett for closing remarks.
Speaker Change: Once again, ladies and gentlemen, if you have a question. It is star one on your telephone keypad.
Speaker Change: There are no further questions at this time I will.
Speaker Change: I'll turn the call to Dave <unk> for closing remarks.
Dave <unk>: Thank you operator.
David Hallett: And thank you to everyone on the call today for your continued support of Exscientia. In closing, let me reiterate why we are in a strong position for the future. The positive results for our part in the PKC Theta Inhibitor Program, the upcoming Phase 1 data for CDK7, and the progression of our LSD-1 and Malt-1 inhibitor programs into the clinic all provide meaningful advancements in our pipeline. The integration of our AI-led drug design capabilities, now supercharged by experimental automation, will help us drive towards maximum speed, quality, and ultimately autonomous drug design.
Speaker Change: Thank you to everyone on the call today for your continued support of Accenture.
Dave <unk>: In closing, let me reiterate why we are in a strong position for the future.
Dave <unk>: The positive results for our partners PK <unk> inhibitor program.
Dave <unk>: The upcoming phase one data for CDK, seven and the progression of our LSD, one or multiple inhibitor programs into the clinic all provide meaningful advancements of our pipeline.
Dave <unk>: The integration of our AI led chip design capabilities now supercharge by experimental automation will help us drive towards maximum speed quality and ultimately autonomous ship design.
David Hallett: We continue our journey to truly transform how drugs will be invented in the future. Finally, leveraging technological advancements and streamlining operations to realize annual savings of $40 million will extend our cash runway well into 2027 and help Exscientia deliver on our mid- and long-term goals.
Dave <unk>: We continue our journey to truly transform how trucks will be invented in the future.
Accenture representative: Finally, leveraging technology advancements and streamlining operations to realize annual savings of $40 million will extend our cash runway well into 2027 and help accenture deliver on our mid and long term goals.
Sara Sherman: Operator. You may now disconnect. Thank you. This concludes today's conference call. Thank you for joining us. You may now disconnect your lines.
Speaker Change: Operator, you may now disconnect.
Speaker Change: Thank you. This concludes today's conference call. Thank you for joining you may now disconnect your lines.
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