Q3 2024 Adaptimmune Therapeutics PLC Earnings Call
Hello, and welcome to the adopt immune therapeutics third quarter 2024 results conference call.
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Speaker Change: I will now turn the call over to Don Odd Cohen Investor Relations for adopting in Dunn. Please go ahead.
Speaker Change: Thank you operator.
Speaker Change: Good afternoon, everyone and welcome to adapt <unk> conference call to discuss our third quarter 2024 financial results and business updates.
Speaker Change: Ask you to review the full text of our forward looking statements from this morning's press release.
Speaker Change: We anticipate making projections during this call and actual results could differ materially due to several factors, including those outlined in our latest filings with the SEC.
Speaker Change: Adrian <unk>, our Chief Executive Officer as she was me for the prepared portion of the call and other members of our leadership team will be available for Q&A.
Speaker Change: With that I'll turn the call over to Adrian walk lish over to you Ed.
Dan: Thanks, Dan and.
Ed: And thank you everyone for joining us today.
Ed: So I'd like to start by addressing the announcement made in todays press release regarding our new strategic business plan.
Ed: This plan has three main objectives.
Ed: One two.
Ed: To streamline operations to focus on our commercial sarcoma franchise.
Ed: To prioritize the R&D programs that have the best return on capital and the best opportunities for transformational medicines for patients.
Ed: And three set the company on a cost operating breakeven during 2027.
Ed: The plan was a result of a thorough review of the entire company and investments across the organization.
Ed: It follows the successes we've had in the initial stages of the T cell relaunch, which is progressing very well against our objectives and which I'll discuss later.
It also follows the successful primary analysis data from the pivotal ignite Aesop trial with let yourself that we announced earlier today.
Ed: The positive results from this pivotal trial, which has met its primary endpoint demonstrating even better outcomes than the interim results, we announced back in June.
Ed: And it will form the basis for the BLA submission for let yourself starting next year.
Ed: Based on these data and a successful approval of T cell right. In August we have increased confidence, let yourself has a high probability of approval and will become an important medicine for people with both synovial sarcoma and MLC L. S.
Now that we have a very clear path towards a successful sarcoma franchise with potentially two FDA approved products, we have even greater conviction in our projection of $400 million and combined U S peak revenue 50, sour and let yourself.
Ed: As such we believe that maximizing the value of this sarcoma franchise is the highest priority for the future of the company.
For shareholders and for the patients we serve.
Ed: And we also felt that now was the right time to make these tough business decisions to achieve this objective.
Ed: So to that end, we will reduce our cost structure to ensure we achieve operating cash flow breakeven during 2027.
Ed: We reduced our head count by about 33%.
Ed: And compared to our estimated 'twenty forecast base will reduce our total operating expenses by approximately 25% next year and over 30% in subsequent years.
Ed: In total this represents a saving of $50 million to $60 million in 2025 and in the range of $300 million in the period from 2025 to 2028 before onetime restructuring costs.
Ed: These savings substantially reduce the financing needs of the company between now and the transition to cash flow positivity.
As a result of this restructure.
Ed: We will reduce our UK footprint and research functions and suspend clinical trial activities with use of cell for ovarian cancer, which will remove the associated CMC and development costs in the coming years.
Ed: The Galapagos collaboration unused yourself head and neck cancer and other indications is going well and will not be affected.
Ed: And we will be continuing with our lead preclinical assets praying and CD 70.
Ed: And we'll suspend investments and other earlier stage pipeline programs.
Ed: We continue to seek strategic partners for frame and CD 70, as well as our leading IP S. C allogeneic platform.
Ed: The following the successful launch of T cell and the great. Let yourself data were presenting at sea to US. The company is now fully focused on building a successful business with a cost efficient commercial infrastructure.
Ed: Based on what we anticipate will be two FDA approved products in sarcoma.
Ed: Achieving our cash flow breakeven objective in 2027.
Ed: And substantially reducing the need to bring in additional capital before becoming cash flow positive.
Ed: This strategy, whilst involving difficult choices to reduce costs is in the best interest of all stakeholders and of the patients who need our transformative cell therapies.
Ed: Now moving on with an update on the T cell relaunch, which is tracking very well against our plan.
Ed: <unk> is the first FDA approved engineered cell therapy for solid tumor and was approved in August but treating synovial sarcoma. So we're now about three months into the launch.
Ed: With previously available treatment options, providing low response rates in the five year survival rate of only 20%, we're finding that T cell or has been embraced by the sarcoma community as a transformational treatment option for this devastating disease.
Ed: We now have nine authorized treatment centers atc's accepting patients from referrals from health care providers and they can initiate the T cell with treatment journey across the U S.
Ed: This is at the upper end of the guidance. We provided previously of six to 10 centers within the first 90 days.
Ed: The more we have an additional four sites that have signed contracts and a further 15 sites that are in active contract negotiations.
Ed: Ultimate goal has consistently been to have a network of approximately 30 itc's offering T cell. It's patients within two years of launch since those Atc's will cover an estimated 80% of the patients treated in sarcoma centers of excellence.
Ed: We are confident we can now activate a full network of 86 by the end of 2025 two to three quarters ahead of our previous projections. This is a testament to the team's focus and to their execution, but also to the high level of engagement of each of our targeted sites.
Ed: On the payer side T salary is approved for a rare and serious form of sarcoma with demonstrated clinical benefit for patients. We've seen significant engagement by insurers and currently insurance plans representing over 67% of commercial lives formerly cover T. Sarah and this continues to increase as <unk>.
Ed: Land.
Ed: Yeah.
Ed: For these types of therapy. The insurance approval process is almost always conducted individually for each patient by the treatment center and the patient's insurer in our adapt clean assist team is involved in every step of the process to support centers and the patients navigate through financial and logistical needs and to make sure that they have a seamless treatment expire.
Ed: Yes.
Ed: On the patient side. We're also very pleased to have increased our first patient in manufacturing is currently ongoing.
Ed: Now approximately 15 patients that have been confirmed as double positive following biomarker testing, meaning that tested positive for the right HLA and from AJ Paul.
Ed: Furthermore, there are at least an additional 25 patients in various stages of biomarker testing before this.
Ed: While it's not all of these patients will be eligible for or ox 40, So a treatment over a particular timeframe. We provide these metrics. So you can see where our level of excitement and confidence is coming from <unk> now very clear that we have a robust flow of patients that will progress to treatment with T. Cira, the remainder of 'twenty four and 'twenty five.
Ed: The patients are there and the commercial model with built is working to make this our available to appropriate patients.
Ed: Going forward, though we're unlikely to continue to provide this level of detail regarding launch metrics and all of this is in line with our previous guidance of expecting our first commercial revenues in Q4 of 2024.
Ed: Just as a reminder, revenues recognized when the treatment center receives T. Sarah So we don't expect meaningful revenues in Q4 this year, but as we progressed into 2025, we'd anticipate modest revenue in the first two quarters that will continue to accelerate throughout the year as patients flow through our expanding network of treatment centers.
Ed: Okay.
Ed: With the commercial launch is tracking to plan along with extremely encouraging feedback from the centers and from physicians with very excited about T cell has potential to improve and extend the lives of people with synovial sarcoma.
Ed: But this is only the first foundational medicine in the sarcoma franchise and then in a separate press release. This morning, we announced the results from the primary analysis of the full dataset from let yourself ignite <unk> pivotal trial.
Ed: Which met the primary endpoint and are even more positive than the interim data we released back in June.
Ed: The full analysis of ignite E. So reinforces the achievement of the primary endpoint for efficacy in the full dataset of 64 patients treated.
Ed: With a 42% response rate overall.
Ed: And this included six complete responses, which is a complete response rate of almost 10%.
Ed: These responses are very durable and although this data set is not fully mature the median duration of response in the MLC or less population is currently just over a year and in the synovial sarcoma population. The median duration of response is just over 18 months.
The full dataset will be presented at the connective tissue oncology society or <unk> meeting on November 16th and will serve as the basis for the BLA filing planned in 2025.
Ed: We expect let yourself to expand our reach beyond T Safra.
Ed: NY ESO expressing synovial sarcoma, and MLC or less patients this will more than double the number of treatable patients and we estimate the legislature will eventually make up over 60% of the combined sarcoma franchise revenue.
Ed: Since the commercial footprint and the ATC. So let yourself are essentially identical to that for T cell, where we will have significant operational channel and cost synergies when we launched the second product.
Following setose on November the 18th we will hold a virtual investor event to further elaborate on these findings from the pivotal <unk> trial and expand upon it what it means for the treatment landscape in sarcoma.
Ed: The event will feature Dr. Sandra D'angelo sarcoma medical oncologist from Memorial Sloan Kettering Cancer Center.
Ed: She was an investigative condition and both the spearhead one clinical trial, the pivotal trial 50, Sarah and the ignite E site clinical trial. The pivotal trial for Letrozole details are available in today's press release and on our website and we hope you join us.
Ed: Moving on to the financial results at the end of Q3, we had approximately $186 million in total liquidity. After further drawdown of 25 million from our debt facility. Following the FDA approval of T. Sara.
Ed: In the third quarter. This year, our total operating expenditure was $55 6 million.
Ed: And for Q4, we expect our run rate operating expenses to be broadly consistent with the first three quarters of 24 and the impact of the cost reduction initiatives I spoke about earlier will take effect starting in 2025.
Ed: In closing.
At that time. He has successfully discovered developed and is commercially delivering the first ever engineered cell therapy for solid Cima.
Ed: And we now have clear line of sight to a second approval and commercial launch of our wholly synergistic product in this franchise.
Ed: We've achieved this with the expertise and commitment from our entire team.
Ed: Now we've made difficult decisions that are necessary to set the company on the path to cash flow positivity as we bring the benefit of the cell therapy franchise to the sarcoma community and we will continue to make decisions to enable us to provide therapies with transformative benefits to patients thus delivering long term success and value to the company and to <unk>.
Ed: Shareholders.
And with that leadership team is happy to take questions operator.
Speaker Change: Thank you.
Speaker Change: John The question queue. You May Press Star then one on your telephone keypad, well hear a tone of dodging your request.
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Speaker Change: Your question. Please press Star then two.
Speaker Change: First question is from Mark from Cowen. Please go ahead.
Mark: Hey, Thanks for taking my questions, maybe just to start off with on the launch.
Remind us how long that process takes came from.
Speaker Change: Physicians expressing interest for particular patient.
Speaker Change: And getting to that 15 patients who have now cleared HLA <unk> testing and then how should we think about the timeline from here.
Speaker Change: Getting that that double positive result.
Speaker Change: No actually kept working through the process negotiating contracts and all of that to them.
Speaker Change: Ultimately consultation.
Speaker Change: Yeah. Thanks, Mark so so yeah. So we provided details in my in my prepared comments that I.
Speaker Change: Think it's the first time, we've provided those which was that those 15.
Speaker Change: Patients that have tested positive for both Biomarkers and additional at least 25 that are in various stages of biomarker testing.
Speaker Change: And I think it is.
Speaker Change: Important to understand that.
Speaker Change: We lost were with Super happy to see that patients are having the opportunity to be identified and testing.
Speaker Change: Primarily confirms the unmet need there and the pent up demand for T cell.
Speaker Change: It's important to note that testing can happen at.
Speaker Change: Any time during the treatment journey, so not all of those patients will necessarily flow through to become a.
Speaker Change: Treated with T cell right in any specific time period, but we do expect the majority of double positive patients to continue their journey and be treated with T cell ROE in the first two quarters of next year and obviously the AR.
Speaker Change: The patients that are coming through the other stages of testing will flow through in proportion to their testing positivity and then over over that sort of similar time frame and subsequently.
Speaker Change: We previously stated that we thought that the period from the very start of a pipe position first wants to test the patients through too.
Speaker Change: Being treated with T cell ROA could take approximately three to four months.
Speaker Change: That's that's important but that also assumes that the patient is being tested.
Speaker Change: Test data than going straight into treatment not being tested really early on in their diagnosis.
Speaker Change: Yes.
Speaker Change: That three to four months I think is a is a is a reasonable estimate as we started launch of T cell.
Speaker Change: So I think that the long and short of that is that we don't expect meaningful.
Speaker Change: Revenues, we do expect first commercial revenues, but we don't expect those to be huge in Q4, but we do expect them to ramp into 2025 as those 15 patients come through in Q1 or the majority of those come through in Q1 and Q2 and then subsequently in and I think the other thing too to notice that we've currently got nine a T seize up.
Speaker Change: Running accepting referrals.
Speaker Change: And we expect that to be continue to escalate as well to get to.
Speaker Change: The full network of approximately 30, plus or minus by by the end of next year, so as that ramps as well patients access to T cell, where all three were they expanding treatment centers will be will be increased so all of that together I think makes us really confident about the shape of the <unk>.
Speaker Change: Hello.
Speaker Change: All eligible and.
Speaker Change: Potentially eligible patients and that will continue to grow and come through as we look at the as we look at the patient flow into 2025, and where we therefore feel quite confident of the patients are there and quite confident in the both the.
Speaker Change: The revenue coming through in 2025 and of course ultimately of the of the peak sales of the soft kind of a franchise.
Speaker Change: Which is driven off of essentially the same funnel in process.
Speaker Change: Okay.
Speaker Change: Very helpful. And then maybe just on the decision around surpassed III.
Speaker Change: Speak to the data that's involved in there and just maybe how much of this decision was driven by Canada data evolving in a way that it was a bit different than kind of what led you to start surpassed III in the first place.
Speaker Change: Your data that went into it versus.
Yes, just that kind of treatment landscape in ovarian.
Speaker Change: Came in flux.
Speaker Change: Yeah. So so I think I think the way we thought about that decision was we looked at the entire portfolio.
Speaker Change: And we looked at it from a from a capital allocation perspective, and what you what you've got if you look at that if you look at our sarcoma franchise that has capital requirements buddies.
Speaker Change: Super close to being commercially real for US I'm project, producing sales say one product on the market one product with these latest data with a clever through.
Speaker Change: That's sort of hugely synergistic commercial front end of that.
Speaker Change: <unk>.
Speaker Change: That's saying that things are.
Very high return on invested capital and at the other extreme of the pipeline you've got a couple of opportunities in CD 70 in prime that are that are absolutely enormous upside. So despite the fact that their early and have some capital requirements more limited capital requirements over the next few years Theres a master.
Speaker Change: The potential opportunity in both of those.
Speaker Change: And then we have used the southern uses allo, obviously, we did the partnership with Galapagos, which we feel really good about them and we have ovarian cancer remaining so we looked at the.
Speaker Change: Requirements in the best book requirements over the next few years for use of cell, where we've got to effectively qualify an entire manufacturing process et cetera, and get a BLA filed but what will ultimately be a single indication because all the other indications of the potential to go on to Galapagos is platform.
Speaker Change: And and that just didn't stack up relative to the other opportunities. So it's really a purely.
Speaker Change: Ah purely capital allocation portfolio prioritization decision.
Speaker Change: For us as opposed to either yes, we still believe very strongly in the in the CD eight next generation constructors as evidenced by the push that we have with Galapagos to put it on their platform and we also we also I think still.
Speaker Change: Our confidence that the use of salaries producing meaningful responses in patients, but from a from a total capital allocation and portfolio prioritization perspective, it just didnt make the cut.
Speaker Change: Okay. Thank you.
Speaker Change: The next question is from Tony Butler with Rodman and Renshaw. Please go ahead.
Tony Butler: Thanks, very much Adrian a few questions.
Tony Butler: I'll ask them, all if I could because some are connected.
Tony Butler: First is around let itself.
Tony Butler: And it's a question around bridging studies that may need to occur what's the risk to that and how does that apply to CMC and importantly would.
Would you anticipate the cost of goods of let or sell to be higher or the same as that for.
Tony Butler: A fair myself and then finally back to.
Tony Butler: Using a cell.
Tony Butler: I Wonder if in fact, you simply go to Galapagos and offer them.
Tony Butler: Whatever data you have and.
Tony Butler: For ovarian cancer platinum resistant ovarian cancer and and that could be.
Tony Butler: Lou up some capital that comes back your way thanks very much.
Speaker Change: Thanks Sterling.
So with respect to with respect to let yourself.
Speaker Change: So we are going to we have a commercial process for let yourself that was established by GSK and <unk>.
Speaker Change: The <unk> trial, the 64 patients that I referred to were all manufactured with that commercial process that that process was.
Speaker Change: It was conducted by mill Tenney biotech and we plan on going to market with mill <unk> biotech process manufactured at the same site that manufactured for for a lot of that to cell patients in that pivotal trial and as such whilst we will need to conduct normal validation work.
Speaker Change: It was not conducted by GSK in the run up to the payer lie.
Speaker Change: We don't anticipate.
Speaker Change: We don't anticipate the way changing manufacturing sites in order to go to market on that so that's that's.
Speaker Change: That's one element to derisking.
Speaker Change: With respect to the cost of goods I think we'd say, we'd say two things one there is the meaning there isn't a massive difference between the cost of goods, we anticipate four left to sell.
Speaker Change: And for T cell, Ralph and we would just point to the previous guidance of 70%.
Speaker Change: Cost margin at peak at peak sales is sort of how we think about that.
Speaker Change: For the sake of a franchise, but it doesn't differ dramatically if it lets us all of them to fiber cell the T cell.
Speaker Change: With respect to use of cell I wouldn't want to I wouldn't want to pre judge it is worth pointing out though that.
Speaker Change: The.
Speaker Change: <unk> that we took with Galapagos was that the proof of concept trial that we're doing.
Speaker Change: With that we've used to sell on the Galapagos distributed manufacturing platform based in head and neck that you didn't have the opportunity to option a.
Speaker Change: A range of other indications up to and including all indications associated with with with used to sell on their platform.
Speaker Change: I wouldn't want to judge what other discussions might happen with respect to the use of cell data.
Speaker Change: Thank you.
Speaker Change: Thanks Danny.
Speaker Change: The next question is from Michael Schmidt with Guggenheim. Please go ahead.
Hi, This is Paul on for Michael Thanks for taking our questions and for all the details on the launch I have a couple of follow ups on the App.
Speaker Change: Had there been patients who have been confirmed positive so far but opted not to receive applications for whatever reason the patient journey and then what's your sort of baseline expectation for conversion rate of getting a patient who does test positive for both HLA and managed to that operation.
Speaker Change: And then secondly, you mentioned one patient had been at least in the third quarter as it been any additional private care or patients.
Speaker Change: In the fourth quarter, given that we're about halfway through the quarter. Thanks.
So with respect to the.
Speaker Change: Patient sort of conversion rate and what we would anticipate.
Speaker Change: And to the question about whether there are patients who have.
Speaker Change: Have not opted to move forward with T cell.
Speaker Change: I think it's just way too early for us to be able to put metrics on that the one thing I think I would say though is.
Speaker Change: To put it in context.
Speaker Change: Does does.
Speaker Change: Some variation in obviously in the timing of when patients get tested in there in that journey.
Speaker Change: We will be pushing it.
Speaker Change: In order to get patients tested early as early as possible in some cases way before they are actually eligible for <unk>.
Speaker Change: 40 salary, which requires prior chemotherapy, but it would be very useful to know for those patients whether they would be eligible when ads in their bearably happens to chemotherapy.
Speaker Change: Ceases to work.
Speaker Change: So so we'll be pushing that to be early so I think the discussion on where the patients are moving forward.
Speaker Change: Aimed to into T cell right.
Speaker Change: Too early.
Speaker Change: We haven't really got good data on the timings and the flow of those patients. It is worth pointing out though that.
Speaker Change: So this is just so much better than the standard of care that.
Our assumption is that the majority of those patients who would be tested double positive will at some point move forward into into being treated with T cell. It just may take a little time.
Speaker Change: But we do anticipate the majority of those 15 patients to move forward in the first two quarters of next year.
Speaker Change: And be treated in the first quarter next year.
Speaker Change: And with respect to the <unk>, we have one eight <unk> to date.
Speaker Change: So we have lots of other patients at various stages of the pipeline without one acre basis was as at this point in time.
Speaker Change: Great. Thanks very much thank.
Speaker Change: Thank you.
Speaker Change: The next question is from Jonathan Chang with Leerink partners. Please go ahead.
Speaker Change: Hi, This is Yan dearly for Jonathan.
Speaker Change: Thanks for taking my questions.
Speaker Change: So first question I have a follow up on the surpass study can.
Can you comment on the accrual rate for ovarian cancer patients in this study.
Speaker Change: And did this factor into your decision to discontinue enrollment.
Speaker Change: And Additionally, when can we expect data from the patients who are already enrolled.
Speaker Change: Limelight for.
Speaker Change: Thanks, Hamid I'll still be the same thank you.
Speaker Change: So in terms of accrual rates actually that trial was accruing reasonably well in 2024.
Speaker Change: We had previously planned on.
Speaker Change: The interim analysis in 2025.
Speaker Change: Trim analysis would be on the basis of Av.
Speaker Change: 13 patients first interim analysis is based on 13 patients per arm of that study so 26 patients in total.
Speaker Change: And I think we were on track to be able to do that.
Speaker Change: We will probably release the data that we have accumulated at some point over the course of the next 12 months, when it's reasonable and meaningful to do so.
Speaker Change: But we are terminating that so we won't have the full data set that we were previously considering in 2026.
Speaker Change: Understood. Thank you. So I have a follow up question. So you mentioned that the preclinical development for <unk> and <unk> 17 is ongoing and how would these two early stage program be impacted by the head count reduction.
Speaker Change: <unk> taken plenty just announced thank you.
Speaker Change: Yes, so we will be focusing the head count the resources that we have in the early phase pipeline on those two on those two programs and moving them as quickly as we can into the clinic and we anticipate and depot both prime now next year.
Speaker Change: And CD 70, following that so I think that will become the key focus for our teams in the early stage research and early development.
Speaker Change: Our teams.
Speaker Change: Understood. Thanks for taking the question.
Speaker Change: Thank you.
Speaker Change: The next question is from Craig.
Speaker Change: On events with Mizuho Securities. Please go ahead.
Speaker Change: Hey, good afternoon, Thanks for taking my questions and congrats on a great data for an <unk>. So I've got three questions. If I could just first I think I heard you say this earlier in the call that just can you just remind us on.
Speaker Change: When there is a time in the future where let us sell is perhaps on the market. How you would think about the shape of the uptake.
Speaker Change: Or trajectory curve.
Speaker Change: Z what you're currently anticipating.
Speaker Change: For T cell Ras so just comparing and contrasting kind of view of.
Speaker Change: Revenue trajectories for each of those products. That's the first question and then second question.
Speaker Change: Just on the cost savings.
Speaker Change: Any color around how to think about the split between.
Speaker Change: SG&A and R&D in terms of those cost savings and then lastly, just on the premium opportunity.
Speaker Change: Really interesting target I think we've seen a little bit of.
Speaker Change: <unk> success, thus far in terms of targeting Prime could you just maybe remind me how you are viewing.
Speaker Change: Your level of confidence and either the target itself or perhaps that the constructs that you're at.
Dancing to get.
Speaker Change: Optimal.
Speaker Change: Efficacy and safety.
Speaker Change: Thanks, Greg So I'll I'll take questions one and three are then I'll ask Gavin to comment on the split.
Of the of the cost savings so in terms of the shape of the uptake curve.
Speaker Change: There is some element there's one element there'll be the same that's driving that other than this one there's one element that we think will be will be quite different. So the element there'll be the same as the process of testing a patient a freezing of patient Manny.
Speaker Change: Manufacturing of patient the negotiations with the insurance company and then get returning that we think that will be roughly the same for both.
Speaker Change: For T cell run for four letters out when it comes to market.
Speaker Change: But the thing that will be quite different is that by the time.
Speaker Change: We have.
Speaker Change: Let us sell approved we will have stood up the full network of approximately 30 Atc's for Thomas Allen. So therefore, we anticipate that we'll be able to engage and have many many more of those sites.
Speaker Change: Dave.
Dave: From day, one for four lenticel than the current ramp for a pharmacy, which we're very happy with at nine so far in all of our White route to 30, but you can clearly see that if we could go through the full 30.
Dave: From day, one, which we will be able to do we believe with let yourself that would be a significant advantage in and that would translate into a a foster uptake relative to.
Dave: Two T cell.
Dave: With respect to pricing.
We we feel we feel the prime is prime is a fantastic target for us doing what we do engineered TCR T cells.
Dave: There probably is not a broader more broadly express can't statistics antigen outlet.
Dave: And the data that we see web people targeting yet.
Dave: Seems to demonstrate the prime is a is a good target and I think the cell therapy data that we've seen I think gave us clear indications that it's possible to see substantial and prolonged responses in the melanoma space in particular.
Dave: And we think that bodes very well for cell therapy treatments that target prime.
Dave: And we.
Dave: We think it's sort of demonstrates as well why cell therapy has the potential to be the gold standard of efficacy for targeting these types of targets versus bi specifics or other types of toxic.
Dave: With respect to why we are so confident about our our program.
Dave: We think we think we're very good at designing T cell receptors.
Dave: This has been our largest mission.
Dave: And where we have taken everything we know about designing T cell receptors to be able to engage T cells to target cancer, and we've put that into our prime program into ADP 600, and we have a we've previously shown a very highly sensitive TCR and we believe that this will.
Dave: Dry based all of our knowledge about how these things work and all the experience with major four we believe this will drive.
Dave: A.
Dave: Clinical benefit in patients.
Dave: And will potentially also drive the ability to target preying at concentrations that are exhibited across a much broader range of tumor types than currently.
Dave: Current therapies are showing efficacy and so that's why we believe that there is opportunity for a best in class program, particularly when you then combine that with.
Dave: Next generation approaches and other engineering to further enhance the program and then the last thing I'll say is yes. There are really two maybe maybe maybe theres a couple of others in preclinical development as well, but a very small number of <unk> cell therapies that credit.
Both programs moving forward into development and for such a huge potential targets a massive unmet medical need.
Dave: We feel the spaces is wide open relative to almost any other target out there. So we're quite excited about the opportunity to put our ADP 600 into the clinic next year.
Speaker Change: Hey, Kevin Yeah, Hi, guys.
Dave: Yes.
Speaker Change: So in terms of the $60 million worth of stock.
Speaker Change: Savings, we expect next year in 2025 split as <unk> savings is roughly 60 40.
Speaker Change: R&D to SG&A as well.
Speaker Change: Further as we think about $300 million worth of savings, we anticipate over the next four years.
Speaker Change: The split is probably slightly more heavily Boston the out years to R&D and that's because we continue to invest behind the commercial team and the success of <unk> market.
Speaker Change: Thank you.
Speaker Change: Thanks, Greg.
Speaker Change: I'm sorry.
Speaker Change: The next question is from Arthur <unk> with H C. Wainwright. Please go ahead.
Speaker Change: Hey, good afternoon.
Okay.
Speaker Change: I had two quick questions. So one is.
Speaker Change: During the screening for the <unk> and <unk>.
Speaker Change: <unk> four and HOA tied for the.
Speaker Change: SME sale.
Speaker Change: So how is the rate.
Speaker Change: You guys seen a real war screening.
Versus our previous guide of 17 40.
Speaker Change: Yes.
Speaker Change: So.
Speaker Change: I'm going to stop I say impossible to tell at the moment and then I'll explain a little bit why.
Speaker Change: So so the HLA test.
Speaker Change: We developed.
Speaker Change: There's nothing particularly special about it and there are many many ways of testing for HLA.
Speaker Change: And indeed.
Speaker Change: We anticipate that.
Speaker Change: <unk> will use a wide range of HLA tests and the uptake on our HLA test indicates that they are indeed, using a wide range of HLA test. So we don't get to see the vast majority of the HLA testing this gets done.
Speaker Change: But but given that the HLA prevalence has been sort of relatively well.
Speaker Change: Correct arise, including in our clinical trials, which were after we conducted almost exactly the centers that we're going into.
Speaker Change: We feel reasonably confident about the 40% to 45% range that we put out there before and don't really see any reason why it would be.
Speaker Change: Why it would be different.
Speaker Change: On the on the major for testing.
Speaker Change: We have had significant uptake of our test.
Speaker Change: However.
Speaker Change: Perfect.
Speaker Change: The rate I don't think that the rates. There is the rate there is quite high at the moment.
Speaker Change: And we anticipate that that's actually because maybe some of the patients coming in to that major for testing have previously been tested with major ballroom found to be positive, but they won't take confirmed with our IAC diagnostic and so I don't think we're really in a position at the moment, where we have sufficient data in sufficient time to be able to.
Speaker Change: Two.
Speaker Change: Confirm or deviate from the previous.
Speaker Change: The previous estimate switch.
I will point out that as previous estimates were conducted on pretty decently sized populations during the clinical trial.
Speaker Change: I'm not sure we would anticipate much deviation from that anyway.
Speaker Change: Got you thanks for that color very helpful and.
Speaker Change: And then second question is regarding the leather sales data.
Speaker Change: I noticed for the.
Speaker Change: No Mr Cola for let us sell the duration of response is about more than 18 months.
Speaker Change: So significantly higher than the <unk>.
Speaker Change: <unk>.
Speaker Change: Is there a.
Reason or we can see you got oil in terms of patient baseline or something else you guys can tell us more color on that.
Speaker Change: So.
Speaker Change: So I'm going to I'm going to.
Speaker Change: Answer that very briefly and then I'm going to ask that.
Speaker Change: Williams to comment on on.
Speaker Change: So my brief answer would be.
Speaker Change: I think I think those data those data are somewhat immature the duration of response is great.
Speaker Change: It's worth noting that in the in the Lancet article four four.
Speaker Change: I myself T cell <unk>.
Speaker Change: <unk> of response was was about 12 months based on that data cut.
Speaker Change: The median duration of response numbers are quite volatile when youre dealing with relatively small numbers of patients, but we're very pleased that we have 18 months.
Speaker Change: At this day to gas and we look forward to presenting that data for the BLA.
Speaker Change: Sure.
Speaker Change: Dennis do you have additional color you could provide on that.
Speaker Change: Yes.
Speaker Change: Hello.
Speaker Change: Yes.
Speaker Change: That sort of in some ways comparing apples to oranges, I mean, it's difficult to compare.
Speaker Change: In duration of responses, particularly as sub population.
Speaker Change: And ignite so to another trial I would say in both cases.
Speaker Change: Duration of response is very impressive.
Speaker Change: It's a very different looking than you would typically see.
Speaker Change: For available second line therapies.
Speaker Change: But I expect when <unk> when that data gets presented this weekend there'll be some discussion around that and I would love to hear at the scientific community thinks about it.
Speaker Change: Alright. Thanks, Thank you for taking my question.
Speaker Change: Thanks.
Speaker Change: The next question is from Yaron <unk> with Wells Fargo. Please go ahead.
Speaker Change: Hi, Thanks for taking our questions. This is on for Yaron. So our question is around the detail why do you want out of the remaining items need to be done before you can file the <unk>.
Speaker Change: <unk> BLA.
Speaker Change: STAAR that rolling BLA.
Speaker Change: So.
Speaker Change: So three things three things that we need to get the BLA, one clinical data positive clinical data from from the pivotal trial, which we now have the full primary analysis off and so we'll be rolling forward too.
That's the first part of the Rolling BLA.
Speaker Change: Secondly.
The.
Speaker Change: The CMC parts of that of the file, which we will be working to.
Speaker Change: Analyze that validate that process et cetera, and be able to file.
Speaker Change: Module three of the of the BLA in due course, and then lastly, I think you got to remember that we are going to be having a parallel file.
Speaker Change: With the NY ESO diagnostic so we're working we're ready with our partner to be able to develop and then have that diagnostic registered and those are the principal components that we would go into the approval package for four let yourself.
Speaker Change: Got it thank you for that and.
Speaker Change: Assuming a patient is eligible for.
Both.
Speaker Change: <unk> and <unk>.
Speaker Change: Patients would choose between these therapies and there is there a possibility of sequential dosing of these two therapies.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Really really good question.
Speaker Change: <unk>.
So the.
Speaker Change: The.
Speaker Change: <unk> four and then Y E. So both significantly expressed in synovial sarcoma patients.
Speaker Change: Both have fairly high levels of expression, it's worth pointing out that the MLR CLS population.
Speaker Change: NY ESO is very very highly expressed in that population and obviously, we don't have an indication for that for T cell <unk> at this point, so that would be entirely additive sales for.
Speaker Change: For synovial sarcoma just.
Speaker Change: Just mentioned the sales projections that we we've put forward.
Speaker Change: Assume that only the NY ESO positive major for negative patients would be treated with with <unk> cel and so it's entirely based on incremental patients and is therefore as you pointed out maybe a little conservative because there's a bunch of patients.
Speaker Change: Who are dual positive.
And a significant proportion and there is the opportunity may be in due course.
Speaker Change: For sequential treatment as as people build familiarity with that and as data comes out on on.
Speaker Change: Patients that have been that have received.
Speaker Change: Are these therapies or sequential treatment with NY ESO MAGE <unk> targeting cell therapies.
Speaker Change:
Speaker Change: And in terms of how patients will choose I think that that sort of remains to be.
Speaker Change: Determined how patients and physicians will choose.
Obviously, we anticipate that potentially target expression will play a part.
Speaker Change: But also position and <unk>.
Speaker Change: Physician.
Speaker Change: Familiarity with the with the treatments.
Speaker Change: And ultimately I think what is clear is that we are launching two therapies into this patient population, who currently have no options and therefore.
And for eligible patients treatment with one or more of one or both of these is going to be transformative for them compared to the existing second line.
Speaker Change: Treatment options and so Gary.
Speaker Change: That I think means that this just means that there's an opportunity here to <unk>.
Speaker Change: Provide cell therapies to more patients with synovial sarcoma and now MLC L. S.
Speaker Change: Got it thank you for the color.
Speaker Change: Thank you.
Speaker Change: The next question is from George Farmer with Scotia Bank. Please go ahead.
Speaker Change: Yeah.
Hi, Thanks for taking my questions.
Speaker Change: Couple from me.
No actually just on the topic of double positive snellville.
Speaker Change: Sarcoma.
Speaker Change: According to the families to label it looks like the duration of response of six months.
Speaker Change: I understand youre seeing 18 months with let itself shouldn't the choice the obvious about which cell therapy, one may want to select.
Speaker Change: So I think I think you've got to move to Dennis point that Dennis mentioned I think the duration of response of six months for.
Speaker Change: For T cell and the label is slightly different to the data set that was published in the allowance it which had 12 months that was down to the fact that there were a couple of patients included in the Ftaa's data analysis, a couple of responders that had shorter duration of responses that were incremental to the data that was in the lancet.
That shows you the variability of the median duration of response data what is clear is that for let's sell him for four five micelle more about 40 plus percent of patients had durations of responses that were more than a year.
Speaker Change: And so this is some very fine lines that are being dealt with here and I think that would be that would be a factor to consider but I'm not sure that that would be the only factor to consider as patients make that choice and if it is if it if they do choose that they would like T cell Route then that's great.
And does not change our overall sales projections for all sarcoma franchise, because whether they get a pharmacy.
Speaker Change: Salary or let T cell.
Speaker Change: We still benefit from.
Speaker Change: The sale and that patient still benefits from it adapt to me in cell therapy for this rare disease.
Speaker Change: Okay.
Speaker Change: Yes. It does thank you and also.
Speaker Change: At the <unk> presentation.
Speaker Change: Earlier this year there was a single grade five adverse events have you seen any since then in this expanded safety analysis.
Dennis do you want to comment on that.
Speaker Change: No.
Speaker Change: Correct. There was a one grade five T cell related events and that will be discussed at the presentation of this weekend.
Speaker Change: So there were additional grade <unk> adverse events.
Speaker Change: Over and above what was presented at Ash, though.
Speaker Change: There has not been.
Speaker Change: Grade five events and SaaS.
Speaker Change: Okay, that's great to hear and then finally and this.
Speaker Change: Restructuring process is there any impact on current executives.
Speaker Change: So we are we are still working through the impact on the organization and we'll communicate that when those decisions that can take them.
Speaker Change: Okay, great. Thanks very much.
Speaker Change: The next question is from Michael Kim with Zacks small cap research. Please go ahead.
Speaker Change: Hey, everyone.
Speaker Change: And thanks for taking my questions.
Speaker Change: First.
Speaker Change: And then in terms of the increased confidence and.
Speaker Change: Reaching $400 million in peak sales peak year sales for the sarcoma franchised.
Speaker Change: I know you talked about the early success, you're seeing with the seller as well as the strong results.
Speaker Change: Coming out of the lead itself pivotal trial, but anything beyond that that is.
Speaker Change: Driving higher conviction in that number and then related to that any shift in the timeline for hitting peak sales as part of that step up in confidence.
Speaker Change: Hello.
Speaker Change: So I think I mean, we started the year guiding the 400 million peak year sales number.
Speaker Change: I think all that's happened since then has just increased confidence walking walking through.
Speaker Change: We got T cell approved the first engineered cell therapy for a solid tumor.
Speaker Change: By no means by no means I E.
Speaker Change: Given in the marketplace and.
Speaker Change: The approved the launch of that is going really well and the discussion about well how many patients are there all of the patients there I think have been thoroughly.
Speaker Change: Our view has been thoroughly vindicated by our experience in the screening and testing process and the first period of time. So the fact that we have now sitting here.
Speaker Change: <unk> double positive patients and a further 25 at some stages of testing at least given that we don't see all of the testing that is ongoing.
Speaker Change: That's just what we can see I think gives us really good confidence in the in the sales uptake for <unk>.
Speaker Change: And also I think helps validate.
Speaker Change: The underlying assumptions about the there.
Speaker Change: Incidence prevalence rate.
Speaker Change: No not exactly.
Not that we cant be super precise on that but I think it helps give us confidence that the patients are there that they are flowing through the system and they can they are addressable by us.
Speaker Change: Then the data the data at <unk>. So I think just just confirms the.
Speaker Change: The efficacy profile that you can anticipate in these rare sarcomas from.
Speaker Change: From cell therapy, and just just note. The fact that this data has continued to improve as we go through the clinical trial from the first interim readout second interim Readouts and now the final. The primary analysis dataset I think just says that this is a building competency in the.
Speaker Change: And the efficacy profile.
Speaker Change: The relationship to the $400 million I think is also.
Speaker Change: Fact that.
The efficacy profile and MLR CLS is very similar to the efficacy profile in synovial sarcoma with a more than 40% response rate really strong durability and obviously that's key because because the MLC ALS population is an important addition to the.
Speaker Change: In order to get to the 400 million sales so all of that together.
Speaker Change: Think I think adds up to that increasing confidence.
Speaker Change: Got it.
Speaker Change: Very helpful. Appreciate that.
Speaker Change: And then maybe just a follow up on the capital front.
Speaker Change: I know you mentioned.
Speaker Change: Drawing down on the 25 million.
Speaker Change: As it relates to the.
The loan with with Hercules, but can you just update us on.
Speaker Change: Where things stand as it relates to the other tranches that are I think built into that agreement.
Speaker Change: Yes.
Speaker Change: Happy to Kevin people Tuscola, yes.
Speaker Change: Further three tranches that should draw Oracle.
Speaker Change: $5 million, which is durable on certain criteria associated with Samsung <unk>.
Speaker Change: $30 million on approval of led to sell and then $40 million.
Speaker Change: Turkey to be decided between both parties.
Speaker Change: Got it okay I appreciate.
Speaker Change: Thanks for taking my questions.
Speaker Change: Youre welcome.
Speaker Change: The next question is from Peter Lawson with Barclays. Please go ahead great.
Speaker Change: Great. Thanks, so much.
Speaker Change: Couple of quick questions.
Speaker Change: When do you expect the next patient to be a freeze.
Speaker Change: Then with the current cash and the line what's your.
Speaker Change: Projection for the cash runway.
Mhm.
Speaker Change:
Speaker Change: I think the answer that is soon first question is will be soon.
But yes and we.
Speaker Change: <unk> that those patients that are currently double positive to start flowing through.
Speaker Change: Through 2024 through the ordering process and into 2025.
Speaker Change: And I think thats.
Speaker Change: Really underlying our.
Speaker Change: Our confidence in the ramp of sales as we go through 2025.
Speaker Change: <unk>.
Speaker Change: In terms of cash runway guidance I think.
Speaker Change: We closed the quarter with $196 million in liquor.
Speaker Change: Liquidity.
Speaker Change: We have announced the restructuring.
Speaker Change: And the cash impact the impact on the expense expenditure next year relative to our guidance in 2024.
And I think it's important to remember that as of the last Q call.
Speaker Change: We stopped providing food cash runway guidance and the principal reason for that was because.
Speaker Change: Smart people like yourself Peter could easily.
Speaker Change: Calculate from our expenses base.
Speaker Change: Runway guidance, what our sport sales projections were and we are not interested in giving Ford sales projections until we have significantly more experience under our belt. So that would be sometime probably next year late next year sometime.
Speaker Change: So because of that we're not providing cash runway guidance. So we still but we have $186 million liquidity in a restructuring program that is designed to shape, our cell shape, all P&L and get us to cash flow.
Speaker Change: Breakeven on an operating level in 2027.
Speaker Change: Okay. Thank you and you think Youll provide revenue guidance next year.
Speaker Change: I think once we've got once we've got a few quarters of sales on drop out I think thats, where we will be able to be more useful to you in providing forward looking guidance.
Speaker Change: Okay. Okay. Thanks, so much.
Speaker Change: Okay.
Speaker Change: Thank you. This concludes our question answer session I would like to turn the conference back over to Adrian Radcliffe for closing remarks.
Adrian Radcliffe: Thank you ever so much for joining us to hear about the launch of T cell and the great progress there and the data from the.
Speaker Change: Let yourself ignite <unk> pivotal trial.
Speaker Change: And the restructuring that will enable us to deliver a profitable sarcoma franchise and cash flow breakeven in 2027 and look forward to updating you in due course as we execute on these things.
Speaker Change: Thanks for your time.
Speaker Change: This brings to a close today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
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