Adaptimmune Therapeutics Q4 2023 Earnings Call Transcript

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March 6, 2024

There are 10 speakers on the call.

Operator

Hello, and welcome to Adaptimmune's 4th Quarter and Year End Conference Call and Business Update. I will now turn the call over to Julie Miller. Julie, please go ahead.

Speaker 1

Good morning. Thank you for joining us. Welcome to our Q4 and full year 2023 update and I refer you to our disclaimer here as well as our forward looking statements in this morning's press release. For the prepared portion of the call, Adrian Rawcliffe, our CEO is with us and other members of our management team are available for Q and A. With that, I'll turn the call over to Adrian.

Speaker 2

Thanks, Julie. Thanks, everyone, for joining today. So, I plan today to recap the progress we made in 2023 and share a little bit about our plans for 2024. I'll be focused primarily on famacell, which will be our first commercial product in our sarcoma franchise. 2023 was a year of transformation for Adaptimmune.

Speaker 2

We completed a corporate restructuring and a merger with TCR2. And following that, we undertook a clinical pipeline review focusing on the highest priority and value assets. We recovered Letiquel and Craine from GSK. I want to remind you that Letisel came with a fully enrolled pivotal trial that has already met its primary endpoint for efficacy at the interim analysis, which was disclosed late last year. We also submitted the BLA for a famicel.

Speaker 2

This is a significant milestone for Adaptimmune, obviously, but it's also a significant milestone for the sector as the first ever BLA for an engineered cell therapy for a solid tumor indication. As well as the submission, we took the opportunity working with the RMAT designation to understand the FDA's requirements on a number of areas and derisk that file and also sort the FDA's agreement on the opportunity for the second cohort of that SPEARHEAD-one trial to provide the confirmatory evidence for full approval. Famicel is the first product in our sarcoma franchise, a franchise that we estimate has PTO sales of up to 400,000,000 dollars And as such, it's a beachhead for innovative cell therapy products in the solid tumor space. It's the first product of our wholly owned pipeline of cell therapy products with the most significant of those in clinical development being a product that was previously known as ADP A2M4CD8, but has now been granted the USAN name of usatresgene autolucel or usacell. Usacell has been developed in ovarian, bladder, and head and neck cancer, and all of this is enabled by our long term and the capabilities needed to be a cell therapy company.

Speaker 2

That means that at this point, we have the opportunity to transition into a fully integrated commercial stage company, discovering, developing and now importantly delivering cell therapy products to patients. I want to touch a bit on our launch preparedness. As Afamicel is currently undergoing its priority review at the FDA. We've been informed that the FDA does not currently anticipate an AdCom for afamasol, but we are clearly on the FDA's clock now. Everything is proceeding as you would anticipate for a product with priority review and a PDUFA date in August.

Speaker 2

Ifamucil is a highly anticipated product, and we intend to be in the position to commercialize ifamucil on approval in August. To that end, I'm delighted to welcome back Cynthia Pacino as our Chief Commercial Officer. She will lead our commercial efforts for Afamicel in due course for Netucel and the rest of the pipeline that I talked about. We are in the final stages of recruiting the commercial team with the majority of our headcount secured and the remaining few roles will be in place by the middle of the second quarter. Same goes for the medical affairs team with the majority of that team recruited and the remaining members of that team due to join us over the next few weeks.

Speaker 2

We've also bolstered the manufacturing team and we'll be scaling that up to meet the commercial demand for a Famicel. I want to remind everybody that we have manufactured a Famicel in house at the Navy Yard facility in Philadelphia. We believe this is a key differentiator giving us not only control and the ability to scale demand according to our needs, but also the opportunity to produce a Famicel at a margin that will be very attractive, and we've referred previously to a 70% margin for our sarcoma franchise at PKU sales. As you see from this slide, we have a clear plan to stand up the necessary infrastructure, and we are on track to do so for that launch, including a sponsored testing plan for the MAGE A 4 diagnostic and the patient support infrastructure necessary to help patients and their and providers navigate through treating patients with Afamicil. Subject to FDA's approval around that PDUFA date, we anticipate actually infusing our first patients with Afamicel in Q4 2024.

Speaker 2

We will be updating as we go through this process to register and launch AfamaCell, and I want to tell everybody that the first such update will occur on our Investor Day on Thursday, 18th April. There, we'll discuss not only our plans and preparation for the commercial launch of the first engineered T cell for solid tumor, but also how we see the opportunity in advanced sarcomas, the positive existing treatment options and the opportunity to hear from patient advisory groups and providers about the opportunity represented by a Famicel for these patients. With the Famicel BLA filed and awaiting approval, we are executing on our plans for our sarcoma franchise. As I referred to earlier, Letiselle has now been recovered from GSK. The pivotal trial has finished enrollment.

Speaker 2

The primary endpoint for efficacy has been met and it's now clear that Letocell is a product in its own right and has the opportunity to go through exactly the same commercial channels that we'll be developing for a famicel, resulting in substantial synergies for these overlapping patient populations. We have the opportunity to reach $400,000,000 in peak sales with these cell therapies with an addressable patient population, a little north of 1,000 patients per year with synovial sarcoma and MRCLS. I just want to make the point that that is in the United States in the launch indications that we anticipate only. We're proud of the progress that we made in 2023. We view this as securing our place on the starting line to make cell therapy products available for people with solid tumors, beginning with our sarcoma franchise.

Speaker 2

This gives us the immediate opportunity to create near term commercial value in 2024 2025 and to set the company up for long term success with a wholly owned pipeline of cell therapy products. And with that, I'll turn over to the operator for Q and A. Operator?

Operator

Thank you. We will now begin the question and answer session. Our first question comes from Greg Suvannavejh of Mizuho Securities. Please go ahead.

Speaker 3

The retinal vasculitis has remained unchanged and that rate is 0.01%, so pretty low.

Operator

Greg, your line is live.

Speaker 3

Greg, new disclosure, the risk of retinal vasculitis during the very first injection of product. Maybe we'll come back to Greg.

Operator

Our next question comes from Jonathan Chang of Leerink Partners. Please go ahead.

Speaker 4

Hi, guys. Good morning and thanks for taking my questions. First question, can you walk us through the assumptions around the $400,000,000 U. S. Peak sales opportunity for the sarcoma franchise?

Speaker 4

And then second question, can you provide any additional color on the cash runway guidance, specifically on what's assumed on the payment front from current and past partners? Thank you.

Speaker 2

Thanks, Jonathan. So, I will take the question on the assumptions from the commercial perspective. And then I'll ask Gavin, our CFO, to talk about the cash runway and the cash receipts from our partners, etcetera. So with respect to the $400,000,000 of PPA sales, I want to reiterate that's a U. S.

Speaker 2

Only number, And it also only speaks to the anticipated launch indications in second line advanced sarcomas, but myxoid round cell and synovial sarcoma for Afamacel, synovial sarcoma for neticel, myxoidround cell and synovial sarcoma. Both of those indications, both of those products are characterized by HLA restriction. They're all HLA A2. It's about 0.45 percent of the patients. And they are also targeted therapies and that they have their own each has their own target.

Speaker 2

A Famicel is for MAGE A 4, Letticel is for NY ESO. So, the starting point is incidence of soft tissue sarcomas of about 13,500 patients per year in the United States. You can cut that for the incidence of synovial sarcoma and myxoid rounds up. Each of those represent 5% to 10% of that total. Then you cut each of those for the HLA at 45% and the target.

Speaker 2

And what you end up with is shown on this slide, which is about 1,000 patients a year coming through that funnel, of which about 400 are for Famicel in synovial sarcoma and the remainder is a little over 600, the incremental patients for Letticell in synovial sarcoma and Letticell in mixed oil rounds on liposarcoma. So, that opportunity with both of these products adds up to a little over a little over 1,000 patients and $400,000,000 of PKS sales. Gavin, do you want to talk about the assumptions on the cash flow going forward?

Speaker 5

Yes, of course, Ed. Hi, Jonathan. So if we step through this, so if you take our closing liquidity of about $147,000,000 And then over the course of our cash runway period into early January 'twenty six, we've got three sources of income that we have a high degree of certainty around. The first of those is the smallest, which is the balance on the payment of £30,000,000 from GSK. We expect to get that in Q2.

Speaker 5

The second component, R and D tax credits from the UK government, we received in January $30,000,000 pertaining to the claim for 2022, and we can anticipate smaller amounts as the regime changes, but we've got good line of sight to those over the next couple of years. And the 3rd and the largest component are the payments from Genentech in association with our collaboration with them on our Allergenic platform. 2 components to that and these are laid out in the 10 ks. The first are anniversary payments totaling $150,000,000 over the period of 5 years. The exact shape of that isn't public and is confidential, but we have 2 of those payments.

Speaker 5

And there's also 2 milestone R and D milestone payments of $25,000,000 We anticipate one of those in 2024 and one of those in 2025. Gives us line of sight to capital north of $300,000,000 Of course, we continue to look to the markets and continue to have BD conversations to bolster that financing.

Speaker 4

Got it. Thanks for taking my questions.

Speaker 2

Thanks, Sohrab.

Operator

Our next question comes from Yanan Xu of Wells Fargo Securities. Please go ahead.

Speaker 6

Great. Thanks for taking our questions. On the patient number, the 400 patient for the Pharmacyl launch. I was wondering how many of those patients can be expected to be reached in the initial 6 to 10 ATCs that might be online? And also regarding the manufacturing capacity, what is the capacity that you expect to be online at the time of the launch?

Speaker 6

And also a question on ADP A2M4CD8, Any guidance in terms of updates on data from SURPASS trials? Thank you.

Speaker 2

So I think the exact split of those patients in those centers will reflect the centers that we stand up first, which ones those actually are. The plan is to start with 6 to 10, but grow fairly rapidly over the 1st 2 years of the launch to up to 30 centers. We've estimated that something a little maybe a little north of 40% of the total patients are currently in those centers. However, we also anticipate, as with other therapies of this nature, that there will be increasing concentration of patients eligible for the therapy in the centers where we have established treatment capacity in our treatment centers. So that we plan on that plan we anticipate increasing over time substantially.

Speaker 2

And then, obviously, we'll be leveraging the existing and well established referral networks within the sarcoma community and sarcoma centers of excellence to ensure that we make a famicel available to as many patients as possible. The 30 centers at maximum will be geographically quite well distributed across the United States, reducing the need for travel. But we fully anticipate that these patients will travel for this therapy. And I want to point out in that regard, as a one off therapy, this has the opportunity of being easier for that travel to occur than if it was at a constantly repeating therapy where the proximity to home would obviously be preferable. With respect to user cell, as we are now calling the product previously known as ABPA204 CD8, that product will that data that we've said for that is it falls in 2 categories.

Speaker 2

The first is the Phase II trial, SURPASS III in platinum resistant ovarian cancer. That being a registrational trial, that trial is recruiting potentially registrational trial. That trial is recruiting as we speak and we anticipate that recruitment going through 2024 and into 2025. And we will be able to give understanding of what happened at the interim analysis, the futility analysis as we go through that trial. But we won't be putting out any efficacy data until at least at a minimum we have enrolled and treated the last patient.

Speaker 2

With respect to the earlier studies on usa cel in head and neck cancer and in bladder cancer, we anticipate recruiting sufficient patients during that trial to make a during this year to make a decision around about the end of the year. And we will communicate the basis of that decision being data in an increased number of Phase I patients, potentially with some of those in earlier lines and in combination with standard of care therapy. John, do you want to talk to the capacity at the Navy Yard.

Speaker 7

Yes, happy to add. So we've said that our maximum capacity for internal manufacturing in Philadelphia is around the 600 patients per year. And while it won't be necessary to get to that range for the launch, we will have enough capacity to meet both our anticipated clinical and commercial needs for the launch. Enabling this capacity is done through onboarding of staff, manufacturing and quality staff, and we're executing against that to make sure we have what we need come August.

Speaker 6

Great. Thanks for all the color.

Speaker 2

Thanks.

Operator

Our next question comes from Gregg Sivanovich of Mizuho Securities. Please go ahead.

Speaker 3

Good morning. So sorry about that this morning. I do have a couple of questions and congrats on the progress on the quarter. I'm curious following the approval of Iovance's Till base cell therapy, I'm wondering what you think the potential implications may be for you guys, whether it makes things easier, any learnings out of that process that could give some incremental insight into how you think the review for your product will be? And then also on Iovance, they were able to get an ICD-ten code as well as the DRG, I think it's 018 inclusion prior to their approval.

Speaker 3

Are you expecting something like that for Famicel? Thanks.

Speaker 2

Thanks, Rick. So with respect to the long anticipated approval of lifileucel by Iovance, we're quite delighted about that. We think that that heralds the fact that 2024, I think, really will be the year where that cell therapy becomes a commercial reality for solid tumors. What will be the first 2 cell therapy launches with the Famicel coming in August. Now having said that, I think they're very, very different commercial propositions, melanoma versus synovial sarcoma.

Speaker 2

But we look forward to Iovance doing a great job because we look to that as indicative of how cell therapies might be adopted in these larger indications. And when you look back in our pipeline, you'll see many such larger patients. And so, Iovance's experience in this large melanoma indication, I think, will be really instructive. And we believe that rising tide lifts all boats in this regard. So we're very excited to see what they're able to do.

Speaker 2

With respect to DRG code, confirm you're right. We anticipate the same code for Afamacel.

Speaker 3

Great. And if I could ask a follow-up, just on the PRAME opportunity, obviously, a lot of interest in that target. How are you guys assessing the competitive landscape in PRAME right now?

Speaker 2

So, I'm going to ask Joe, Chief Scientific Officer, to take a stab at that and talk about that and our differentiation of our PRAME program. Jo?

Speaker 8

Thanks, Ed. Yes, we're very excited about PRAME as a target, as the field in general is. I think there's obviously we are well aware that there's lots of competition in this area from bispecifics as well as cell therapies. But we're still quite bullish about our taking that forward. So in our own internal analysis where we've looked at other competitor products, We think our TCR does have a different safety efficacy profile, which we are very happy with.

Speaker 8

And we're also looking at ways of bringing next generation additions to PRAME to actually make it competitive. So we want to look at our TCR for PRAME in multiple different constructs so that we can choose the best one in the clinic and take that forward. So we will be we start with the TCR, which we believe has a good safety profile, and we're looking at ways of improving the efficacy for next gen opportunities. And PRAME is a really complementary target to our other programs, both in ovarian with UZACEL and other indications. So we're hoping to leverage our clinical experience in those indications to really push PRAME forward.

Operator

Our next question comes from Peter Lawson of Barclays. Please go ahead.

Speaker 9

Good morning. This is Shay Theini on for Peter Lawson. Thank you for taking our question. Just to touch a little bit more on the FamiCell launch in 3Q, I believe you've highlighted that you'll be focusing on 6 to 10 treatment centers in the beginning. Can you maybe add a little color for how you're expecting to scale up to the 30 additional treatment centers and how long that might take?

Speaker 9

And if you're expecting any kind of bolus of onboarding of patients in 3Q? Thank you so much.

Speaker 2

Thanks. So, yes, we anticipate that the first wave of treatment centers will be up and running within that launch window, 6 to 10 within that launch window, and then expanding quite rapidly. We anticipate that we will be at up to 30 centers within the 1st 2 years following launch. Those treatment centers, the initial ones are almost exclusively major sarcoma well, they are all major sarcoma centers. They are obviously, therefore, major treatment centers and they have deep experience of cell therapy.

Speaker 2

They almost also have a lot of experience of working with a Famicel. And as we roll out to the 30 top centers, since we have been conducting our clinical trials and GSK was conducting the clinical trials for Letticell in major sarcoma centers, there's obviously going to be a large overlap between the clinical trial footprint for those two products and these centers. That has the advantage that the physicians know and understand a Famicel well, having utilized it in clinical trials, that they're well used to cell therapy and that they are indeed the major treatment centers, the top tier of the sarcoma centers of excellence.

Operator

This concludes the question and answer session. I would like to turn the conference back over to Adrian Rocklev for any closing remarks.

Speaker 2

Thank you. And thanks everybody for being on the call and thanks for your questions. We're excited to have come this far in 2023. We look forward in 2024 to our first commercial approval and launch. And we'll be updating you as we go through the year, starting, I think, with our Investor Day on 18th April at our Navy Yard facility in Philadelphia and we look forward to seeing as many of you there as possible.

Speaker 2

Take care.

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Key Takeaways

  • Adaptimmune has submitted the BLA for famicel, marking the first ever biologics license application for an engineered cell therapy targeting a solid tumor, with a PDUFA date set in August 2024 and no anticipated AdCom.
  • Famicel will launch as the first product in Adaptimmune’s sarcoma franchise, which is estimated to address a U.S. patient population of ~1,000 per year and drive up to $400 million in peak annual sales.
  • The company has in-house manufacturing capacity at its Philadelphia Navy Yard facility to produce up to 600 patients’ doses annually, supporting a projected ~70 percent gross margin for the sarcoma franchise.
  • Adaptimmune has recovered leticel (formerly Letisel) from GSK, with its pivotal trial fully enrolled and interim efficacy endpoints met, enabling synergies in commercial channels alongside famicel.
  • With $147 million in cash plus secured payments from GSK (≈$30 million), UK R&D tax credits (≈$30 million) and Genentech collaboration milestones (≈$200 million), the company’s runway extends into early 2026.
A.I. generated. May contain errors.
Earnings Conference Call
Adaptimmune Therapeutics Q4 2023
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