Gracell Biotechnologies Inc (GRCL) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Gracell Biotechnologies Fourth Quarter and Full Year 2020 Conference Call. (Operator Instructions) I would now like to turn the conference over to Kevin Xie, CFO. Please go ahead.

Good morning, and welcome to Gracell's Fourth Quarter Earnings Conference Call and Webcast. This is our first earnings call as a public traded company. Yesterday, we issued a press release announcing unaudited financial results for the 3 months ended December 31, 2020. We encourage everyone to read this press release as well as Gracell's Form 20-F for the year-end December 31, 2020, which will be filed with the SEC by April 30, 2021.

There is a slide presentation accompanying today's call. This slide presentation and the fourth quarter earnings release can be accessed on the Investor Relations section of Gracell's website at gracellbio.com. I would like to remind you that this call is being recorded for replay.

Please note that certain information discussed on this call today is covered under the safe harbor provision of Private Securities Litigation Reform Act. We caution listeners that during this call, results management will be making forward-looking statements. Actual results may differ materially from those stated or implied by these forward-looking statements as a result of various important factors, including the clinical trial results of our product candidates; actions of regulatory agencies, which may affect the initiation, timing and progress of our clinical trials and the marketing approval; our ability to achieve commercial success with any of our product candidates is proved; our ability to obtain and maintain protection of intellectual property for our product candidates and the technology platform; and other risk factors more fully disclosed in the Risk Factors section of our final prospective and any such filings with the SEC.

This conference call contains time-sensitive information that is accurate only as of the date of this live forecast, March 10, 2021. Gracell undertakes no obligation to revise or update any forward-looking statements to reflect events and circumstances after the date of this conference call, except as may be required by security laws. With me today are Gracell's Founder and Chief Executive Officer, Dr. William Cao; our Chief Medical Officer, Dr. Martina Sersch.

We're excited to discuss our innovative technology and the clinical pipeline of CAR-T therapies in today's call. We also look forward to sharing with you our recent business development and upcoming targets for 2021. With that said, I'd like to turn the call over to Gracell CEO, Dr. William Cao. William?

Thank you, Kevin, and again, welcome, everyone, to our Fourth Quarter Earnings Conference Call. For those of you that are new to Gracell's story, we are a global clinical stage bio-pharmaceutical company dedicated to discovering and developing breakthrough CAR-T cell therapies. CAR-T cells can be classified in 2 groups: as either autologous, derived from T cells of the cancer patients; or allogeneic derived from the T cells from a healthy donor.

We have developed our proprietary technology platform in each of these areas, FasTCAR and TruUCAR, that we believe represent game-changing advances in the CAR-T industry. By leveraging these proprietary technology platform, Gracell is developing a rich clinical stage pipeline of multiple autologous and allogeneic product candidates to overcome major industry challenges that are persisted with conventional CAR-T therapies. Including lengthy manufactured times, sub-optimum production quality, high therapy costs and lack of effective CAR-T therapies for solid tumors. Our pipelines of autologous and allogeneic cell therapy candidates, given ongoing studies with highly competitive data in several indications.

In addition, we have assembled a new highly experienced leadership team in this space with a proven track record of success. We are very excited to have completed a successful IPO that was supported by top-tier institution investors that our CFO, Dr. Kevin Xie, will discuss in greater detail shortly. We believe the support of our investors reflects confidence in our highly differentiated CAR-T therapies and the pioneering technology platform.

So on Slide 5, you'll see that Gracell has developed 2 proprietary sophisticated technology platforms to improve treatment outcomes, and address commercial bottlenecks. FasTCAR is Gracell's to autologous CAR-T platform, designed to overcome challenges of conventional CAR-T therapies by significantly shortening cell manufacturing time from weeks down to next day, which importantly also contribute to enhanced T cell fitness.

TruUCAR is Gracell platform of allogeneic CAR-T therapies that it can be administered off-the-shelf at a lower cost. Unlike autologous CAR-T therapies, these products use T cells from non-HLA-matched healthy donors, making them readily available to treat cancer patients.

We have also developed proprietary technology enhancements, dual CAR and enhanced CAR that can be leveraged with our FasTCAR and TruUCAR platforms to further enhance and differentiate our CAR-T product candidates. FasTCAR-enabled dual CAR therapies are designed to control relapse in patients by reducing the lifehold of antigen escape. For allogeneic CAR-T cell therapies, dual CAR can be an effective strategy to reduce rejection of CAR-T cells by patients' immune system.

Our second technology enhancement, enhanced CAR, further strengthened CAR-T cells functionality, for example, by overcoming the immunosuppressive tumor microenvironment and/or increasing cytokine signaling. With enhanced CAR, we can also enable CAR-T cells to achieve intended functions by regulating the expression of one core, a combination of cytokine, cytokine receptors or checkpoint ligand.

On Slide 6, you will see how our autologous FasTCAR T platform have distinguished itself from conventional CAR-T approaches by significantly shortening the manufacturing time from industry norm of 2 to 6 weeks to just 22 to 36 hours, effectively creating a next-day manufacturing system. We have developed a proprietary system of concurrent activating and transducing resting T cells in a single step, where we have many of our proprietary elements working together to ensure high transduction efficiency while also avoiding aging the cells.

Because our process greatly preserves T cell fitness, our therapies only need a small number of cells in comparison to others, eliminating the need of ex vivo expansion. This is in contrast to lengthy and costly steps in conventional CAR-T manufacturing to activate, transfuse and expand T cells. The time saved is critical for patients with rapidly progressive disease and it can make a difference in clinical outcome. And together with substantial cost savings, we believe fast CAR-T can increase accessibility of cell therapies for cancer patients.

However, the benefits of our FasTCAR platform go beyond shortening the manufacturing time and increasing the speed in which the therapies can be delivered to patients. As we show on Slide 7, the platform is designed to overcome several other key challenges with conventional CAR-T therapies. The most notable benefit is the enhanced T cell fitness. CAR-T cells manufactured on this platform appear younger, less exhausted and showing enhanced proliferation, persistence, bone marrow migration and tumor cell clearance activities, as demonstrated in our preclinical studies.

Based on clinical data today, our lead FasTCAR therapy has demonstrated fast, deep and durable responses in multiple myeloma patients, which Dr. Sersch will elaborate upon shortly. Moreover, we have developed a fully closed production design, meaning from leukocytes collected from the patient to the finished product in the IV bag. The entire manufacturing process is enclosed. This reduces the risk of cross contamination and enables scalability by allowing multiple patient samples to be processed in a single clean room.

On the cost side, the short-term manufacturing time reduces the direct cost of consumables, labor and facility in a linear fashion while also generating substantial cost savings to the health care system since our fast process reduces the amount of time the patient is waiting for the therapy.

On Slide 8, we show how we are able to couple our innovative FasTCAR platform with the technology enhancement of dual CAR. TruUCAR is designed to control relapse in patients in fast class by reducing the likelihood of antigen escape and to reduce rejection of the CAR-T cell by patients treated with TruUCAR-enabled allogeneic CAR-T therapies. Stimulated by TruUCAR dual antigen-targeting CAR-T cells have the potential to maintain in vivo longer than single antigen targeting CAR-T cells.

Now I will hand over the call to our CMO, Dr. Martina Sersch, to discuss the pipeline and our clinical programs. Martina, please go ahead.

Thank you, William. As mentioned before, Gracell is developing a rich clinical stage pipeline of multiple autologous and allogeneic product candidates for the treatment of cancer. We partner with renowned hospitals in China where investigator-initiated trials are conducted with several of our pipeline assets.

Our lead program is a multiple myeloma BCMA/CD19 dual-targeting CAR-T product, GC012F, which has a highly differentiated design and is manufactured using the FasTCAR platform. We presented data for patients with relapsed/refractory multiple myeloma at ASH 2020, and we are continuing to developing GC012F, expanding to other indications and lines of therapy.

We are planning on submitting an IND application in both the U.S. and China in the first half of 2022. We are also applying the FasTCAR platform to other indications, including, but not limited to, T-ALL and T-MHL. Based on our strategy to advance first-in-class products, we are currently assessing our duo targeted platform to serve the best candidate for T-NHL.

Our second proprietary platform, TruUCAR is our allogeneic off-the-shelf solution for the treatment of cancer. But we are currently in studies in China and planning on submitting INDs in the U.S. and in China in the close future. GC027, manufactured using the TruUCAR platform, is currently being developed as off-the-shelf therapy for T-ALL.

Last but not least is our allogeneic donor-derived CAR-T GC007g for the treatment of T-ALL where we already obtained IND approval, including the approval for a seamless Phase I/II registrational study for GC007g in China. This pivotal study is currently ongoing and enrolling patients at multiple centers in China.

Our lead asset is the FasTCAR-enabled CAR-T cell therapy candidate, GC012F, our BCMA/CD19 dual-targeting CAR-T for the treatment of multiple myeloma. In the next couple of slides, I'll be presenting interim results of our ongoing Phase I investigator-initiated study.

Last year at ASH, we presented the first data on our FasTCAR-enabled dual-targeting BCMA/CD19 CAR-T GC012F for the treatment of multiple myeloma patients who are relapsed and/or refractory to prior therapies. GC012F is a novel dual-targeting product targeting 2 different antigens, BCMA and CD19. BCMA is universally expressed on malignant plasma cells, while CD19 is expressed on both multiple myeloma cells and myeloid progenitor cells. Preclinical work performed by Gracell has shown the targeting both BCMA and CD19 is a highly efficacious approach.

Moving to Slide 12. GC012F is currently being evaluated in an ongoing investigator-initiated study in China for the treatment of multiple myeloma. At the data cutoff July 17, 2020, 16 multiple myeloma patients have been enrolled, of which 93.8% or 15 out of the 16 had high-risk features according to M smart 3 criteria. High-risk patients are very difficult group of patients to treat as they relapsed early in both progression-free survival and overall survival are much shorter as compared to standard with patients.

It is important to emphasize that our data has been generated among predominantly high-risk patients. High-risk patients comprise 20% to 30% of the overall multiple myeloma population. Furthermore, the patients enrolled were heavily pretreated with a median of prior lines of therapy, including standard of care treatments like -- inhibitors, imids and anti-CD38 therapy. Patients received a single infusion of CAR-T cells at 1 of 3 dose levels with the highest dose level at 3 10 -- cells per kilogram, which is a very low dose as compared to other CAR-T therapies.

On the next slide, I will walk you through some of the data we recently presented at the ASH 2020 Annual Meeting. Looking at the plot on Slide 13 and the bar graph, you can see that the overall response rate at time of data cutoff, July 17, 2020, was 93.8% with all responses seeing very good partial response or better, which are deep response levels in multiple myeloma. For dose level 3, all patients achieved stringent complete response, which is the deepest response possible.

Also, we evaluate -- MRD, minimal residual disease at 6 time points. At the highest dose, dose level 3, all patients evaluable at month 6 had achieved and maintained MRD-negative stringent complete response through 6 months follow-up, which is a very long duration for high-risk late-line patients. The combination of MRD negativity and stringent complete response has been correlated with prolonged progression-free survival and overall survival in large sets of data regardless of line of therapy.

The median duration of follow-up was 7.3 months ranging from 1 to 10 months. The study is still ongoing and accruing patients. In summary, fast, deep and durable responses were observed after GC012F treatment in a very difficult-to-treat and heavily pretreated patient population.

As shown on Slide 14, to date, we observed a favorable safety profile with cytokine release syndrome, or CRS, and expected side effects with CAR-T therapy of predominantly lower grade 1 and 2 was 14% or 87.5% of the patients experiencing CRS of Grade 1, 2 and 2 patients experiencing CRS of Grade 4. No patients to date experience Grade 4 Or grade 5 CRs and we have not observed any ICANS or immune effector cell-associated neurotoxicity.

The median time to onset of CRS was 6 days, ranging from 2 to 10 days. We believe this data indicates GC012F's potential to deliver fast, deep and durable responses in relapsed/refractory multiple myeloma patients, and it's also a validation of our FasTCAR technology platform. We look forward to providing additional data in upcoming scientific meetings.

As we continue to finalize our contract with the U.S. CDMO and launch the tech transfer, we have updated our guidance for the anticipated filing of our IND applications in the U.S. and China from the end of 2021 to the first half of 2022. As for the ongoing IIT study, we continue to advance the clinical program in China, including potential additional indications and earlier lines of therapy.

Let's turn to Slide 16 to discuss Gracell's second lead candidate with best-in-class potential and allogeneic TruUCAR-enabled CD7 targeted CAR-T cell therapy. Allogenic CAR-T is derived from T cells from healthy donors and is off-the-shelf CAR-T therapy provides hope for applicability to a broader patient population.

A major challenge for effective and safe allogeneic cell therapy is host-versus-graft rejection. A common strategy used in research to mitigate the risk for graft-versus-host disease is the administration of anti-CD52 antibody therapy. However, side effects of this therapy could include an increased risk of potentially -- infections.

At Gracell, we have addressed the challenge of graft-versus-host-disease in our TruUCAR platform by using the novel design of a dual function CAR or dual CAR. One CAR targets the malignant cells and the second CAR targets the patients on T and natural killer cells to prevent host-versus-graft rejection and allow the -- CAR-T to expand well. As such, TruUCAR can be administered as a stand-alone therapy. This offers further potential benefits in cost savings.

GC027 is our TruUCAR-enabled CD7-targeted CAR-T cell therapies for the treatment of T cell acute lymphoblastic leukemia. T-ALL Is a significant unmet medical need, a highly aggressive form of cancer with most patients relapsing within 2 years after first diagnosis and survival rate at less than 25% after first relapse. As of February 2020 -- adult relapsed and/or refractory T-ALL patients have been treated with a single infusion of TruUCAR GC027 at 1 of 3 dose levels. We presented our preliminary efficacy and safety data for GC027 at AACR and EHA 2020, both at our presentations.

We are very encouraged by the data, which we present here on Slide 18. As of February 2020, we observed that all 5 patients had achieved a complete response as primary response. For patients, [over] 80% had achieved an MRD-negative complete response at day 28 and have maintained this response through the data cutoff date.

With regards to the safety profile, we observed no neurotoxicity events or acute graft-versus-host disease. 4 out of 5 patients experienced CRS of Grade 3 and 1 out of 5 patients experienced CRS of Grade 4. Considering this is a high unmet medical need with few treatment options available, we believe this may still present a favorable benefit risk profile for patients in need of an effective therapy after relapse. We look forward to presenting longer-term follow-up data and additional patients treated for GC027 at AACR this year.

I would also like to discuss results of our investigational allogeneic donor-derived CD19-directed CAR-T cell therapy, GC007g, for the treatment of B-cell acute lymphoblastic leukemia on Slide 20. GC007g is manufactured by utilizing healthy donor-derived HLA-matched T cells, which have the advantage of seeing of higher quality than the patients on the cells. This therapy provides a treatment option for patients that relapsed after transplant and may not be eligible for autologous CAR-T therapy.

Clinical IIT data as of June 2019 showed an overall response rate in 11 of 13 patients or 84.6% at day 28 with 10 achieving MRD-negative results. We observed 12 out of 14 patients experiencing CRS of any grade with only one experiencing a CRS Grade 3 or higher. There was no neurotoxicity events observed, and 2 patients, or 40.3%, showed the kind graft-versus-host disease. Patients are still being followed for efficacy and safety. We are clear that China's NMPA has granted approval for the IND, including a seamless Phase Ib/II registrational study. The study is open and enrolling patients.

Beyond the lead programs discussed today, and as we show on Slide 21, we have a robust early-stage pipeline for FasTCAR and TruUCAR-enabled product candidates for several indications in solid tumors and hematological malignancies that have shown promising results in preclinical models. We expect to launch several investigator-initiated trials for these candidates over the next 6 to 18 months.

I will now pass it over to Kevin to discuss our R&D and manufacturing facilities and our financial results. Kevin?

Thank you, Martina. Let's continue with Slide 22. Strong capabilities in CAR-T cell manufacturing are critical components for both our clinical development and future commercialization as CAR-T cell therapies are complex and, in the case of autologous therapy, highly personalized.

Now we control our manufacturing through our GMP-compliant manufacturer facility in Suzhou and the process development center in Shanghai, which will enable us to be self-sufficient in the production of CAR-T cells for clinical development and early-stage commercialization in China. In the U.S., we will work with a well-known CDMO with whom we are in the last stages of finalizing the contracts. Currently, our U.S. operations have started with finance and clinical coordination. We're also planning to establish our R&D facilities in the U.S.

Turning to our financials on Slide 23. I would like to touch on a few financial trends for the fourth quarter and the fiscal year 2020. The fourth quarter ended December 31, 2020, R&D expenses were RMB 60.7 million or USD 9.3 million, as compared to RMB 38 million in the prior period. This increase was driven by increased spending to advance our preclinical and clinical programs as well as higher depreciation costs related to our expanded manufacturing facilities.

Now let's focus on the results for the full year 2020 versus 2019. For the full year 2020, R&D expenses were RMB 168.8 million or USD 25.9 million compared to RMB 119.2 million for the full year 2019. This increase was due to increases in manufacturing and other costs to support the progress of our preclinical studies and clinical trials, higher personnel expenses related to the expanded R&D head count and increased depreciation expense 4 of manufacturing facilities.

Net loss attributable to ordinary shareholders for the year was RMB 274.6 million or USD 42.1 million compared to RMB 200.9 million in 2019. As of December 31, 2020, we had RMB 773.1 million or USD 118.5 million in cash and cash equivalents and short-term investments. In early January, as we mentioned, Gracell completed an IPO on the asset of 11 million American depository shares, each representing 5 ordinary shares at a public offering price of $19 per ADS. With the full exercise of the over-allotment provision by the underwriters, the company realized net proceeds of approximately $220 million.

As of January 31, our cash level is approximately RMB 338 million. So the company is well financed. We expect our cash use to be approximately RMB 120 million for the year of 2021 primarily to fund our R&D programs in the U.S. and China and expansion of our GMP manufacturer facilities in Suzhou.

Following this recent business accomplishments, the Gracell team is energized as we work towards accomplishing our operational goals for 2021. Looking ahead, we have many upcoming targets, as we show on Slide 24, to develop our R&D programs and expand our operations in China and in the U.S. We have just recently received IND approval in China for GC012F our FasTCAR enabled CAR-T therapy for the treatment of T-ALL. So now we have 2 IND studies open in China.

Our teams are working aggressively to prepare for the IND applications in the U.S. and China for GC012F for the treatment of multiple myeloma with the immediate next step being to announce the U.S. CDMO we will be partnering with. Also, we will continue providing clinical program updates, including longer follow-up at various medical conferences, including an update at AACR on GC027.

Furthermore, we're supporting our clinical operations by expanding our GMP manufacturing facility in China and establishing R&D facilities in the U.S. We see these important operational targets will enhance Gracell sales effort to advance its clinical pipeline. With that, I'd like to turn it back to the operator to open the session for your questions. Operator?

(Operator Instructions) Our first question today comes from Mohit Bansal of Citigroup.

And congrats on all the progress. So maybe one question regarding the IND for 12F. So in terms of the steps from now to filing the IND, could you help us understand -- so you mentioned that U.S. CDMO selection is one step. But could you help us understand what other IND work that would be needed even after you select the U.S. CDMO?

And also, in terms of your talks with the FDA regarding starting a trial in high-risk versus standard patients, could you just talk a little bit about the flavor of that discussion how do you plan to discuss with the FDA?

Dr. Sersch?

Yes. Thank you, Mohit. Great questions. So as we already kind of talked about, we have to perform the tech transfer after we sign a contract with the CDMO, and we are planning on conducting several -- probably several interactions with regulatory agency, FDA and in China to proceed and get insights from them based on their recommendations. And we are not basically, at this point in time, giving out information on our clinical plans. And that is to your question about high-risk versus all-comers, et cetera, et cetera. Those discussions are still confidential.

The next question comes from Kelly Shi of Jefferies.

And congrats for the great IPO and also the pipeline progress. So I have a question regarding the data events over in this year. Could you help us with that expectation on -- like what are the details you can provide regarding the patient number and a follow-up for both GC012F and also GC027?

I think Martina will take that one

Sure. Thank you. So you will be seeing data at AACR so that we can say we have been accepted for poster presentation at AACR. That is for 027, and that data will be long-term follow-up. As you may remember, we presented last year's data with a cutoff of February 2020.

So now you have 1 year longer follow-up for those patients we have treated. In regards to 12F, we are also planning on presenting different time line updates during the course of this year. So you will be seeing data at least one of the center's conferences during 2021 and, following longer-term follow-up, respective to time line updates.

Great. And I also have a follow-up. I just want to dig a little bit deeper into details for the GC012F assume next key data update would be in 12 months, follow-up on the duration readout. Just curious about your take regarding any difference, you say, of the treatment paradigm for multiple myeloma patients in China. And what do you think that will be the impact on the duration? When are we trying to compare to competitors' trial running in the U.S.? And also, what is the impact of high-risk patients? I mean do you have a large proportion enrolled on our trial? And what would be the expected on the duration from that perspective?

Yes. Just one clarification. So the longer, 1 year, 12 months is based on the data cutoff for 027. That was February last year. So submission to AACR was in January. That is that 12 months. For 012F, we will be providing updates based on availability of that data. And what we can say now is that all patients that we would report on will have passed at least the 6-month follow-up landmark.

Now as you may remember, this is always dependent on the submission time line for those conferences. So obviously, a time line presentation only makes sense if the patients have passed that time line, and then we can report on all of the patients we have treated to get the full picture.

Now about the expectation for high-risk patients, I just also want to caution us that we must be reasonable. 6 months in the life of a high-risk patient who is relapsed and/or refractory with many prior lines of therapy, having seen basically all the standard of care that is available is already a very long time, even though it may not sound like it. Usually, those patients relapse very soon after treatment, and that could already be after 2 or 3 months.

So having seen those patients what we already presented passing the 6 months and maintaining their stringent complete negative response is already very long time. The expectations for the 12 months, again, for high-risk patients will be different as compared to regular risk patient. And that is due to the fact that those patients exhibit certain marks of their disease that make them progress very fast.

And that is true, just to give you another example, in frontline setting, patients do relapse often within 1 year. And that is in a frontline setting where high-risk patients have not seen any therapy. So usually, those patients have a very long and durable response, but not the high-risk ones. So I just want to caution about the expectation and the comparability of our data, and high-risk patients should not be compared with data on regular patients.

The next question is from Tyler Van Buren of Piper Sandler.

I have 3 questions for clarification. I guess the first one is for 12F, do you guys still plan to start the frontline study cohort in China? And then the second one is with respect to just kind of pipeline prioritization. I see that 19F is listed but not 7F. So it seems like you guys might have decided on 19F. Just curious to get any color there. And then the third one is on GC008E for ovarian and breast. Clearly, very interesting indications being solid tumors. Can you just provide a little bit more background on that program as well?

I think Dr. Sersch will address the first 2 questions, I'll take the third question.

Yes. Sure. So absolutely, we are still actually in the planning stages for our frontline protocols, which we will have more than one, and we are really excited about that. As we discussed in prior meetings, CAR-T may play a major role for frontline patients in different settings. And based on the other questions kind of on the solid tumor part, I would, I guess, take it over to William, who will respond to the preclinical questions here.

This is still in the preclinical stages. And for 7F and the prioritization, so we would like to focus on dual CAR, dual FasTCAR. There is a huge gap, as we can see. The single CAR, they do have activity. However, the activity is, in many instances, not good enough. So we are hoping with dual targeting to increase that activity and provide even better responses and longer duration of responses for the divisions. William?

Yes. Regarding the GC008E for solid tumor, that is early pipeline and the timing to enter clinical IITs later this year. So we are still in a vigorous process of in vitro and in vivo testing. The animal model just started. So we do not expect any significant data coming out in the coming months, but hopefully, we have some readouts in this year, for sure.

Are you able to say what target that is? Or are you guys not disclosing that yet?

Not yet.

The next question is from Nick Abbott of Wells Fargo.

The first one is on the definition of high-risk patients, myeloma patients. So Martina, do you think these mSMART 3 criteria have regulatory relevance with respect to patient selection for a clinical trial?

So that's a very good question. Actually, from my prior work-life and experience with regulatory interactions, they do. FDA looks at the small criteria. However, we may choose to use different criteria for frontline study, and that may be based on -- cytogenetic risk and ISS stage.

And then the frontline trials that you are proposing to conduct in China, do you think those patients could contribute to a U.S. label, I mean, like a more of a global strategy in frontline disease?

So the way we think about it, these are proof-of-concept studies is really important for, I would say, the community to understand about the efficacy and frontline setting as we do believe this will be highly efficacious, and patients may need that really deep response early on to then even provide more benefit and longer benefit later on.

However, these are concepts. So we went back to show this. Using patient data for international approvals requires, however, more steps. And one of the steps is the manufacturing processes need to be transferred and then compared, which is one of the steps we are taking now while we are providing all the data of the tech transport to regulatory agencies to accept that data. However, the outcome, of course, we can't say anything at this point in time but is the.

So I think that answers my next question, which is, I can understand why U.S. IND would be delayed for 12F because of the tech transfer and just all the steps that have to go through, but I was surprised that China IND was delayed. So is that because you want to ensure comparability between products made in the U.S. and China facilities?

There's several reasons. One of the reasons is that we would like to use the patient data we generate with the product for the regulatory filings. In China, as you may know, some of the processes take a lot longer just nearly from a time line perspective, and that is not even a delay. It's just basically the way and faster.

One of the hopes we have is the outlook for the overall time line for us has not changed. We see, at this point in time, there are gaps, meaning there is no other studies ongoing in CAR-T in relapsed/refractory. So there's a lot of patients waiting for therapy. We believe enrollment will be very fast. And what we do now in preparation for it is extremely important. So we don't have any gaps or delays later on, which then will be having more impact than doing the ride from the get-go.

Okay. And so can you just elaborate on use of -- I think you said shared use of patient data? Sorry, can you just elaborate on that, please?

So basically, the use of the patient data usually is allowed for safety, for example. So as you may know, the regulatory guideline is you have to conduct Phase I, II , in some instances, if you need a randomized study Phase III study, really important are the first steps, and that is safety. To establish safety is really -- it's the longest process because that study can only enroll if it's an IND study, patients one by one with an adequate observation period.

Now if we have adequate safety information already available, this may help us having a faster seamless design possible in China and in the United States. As we have shown for 7g while we did have an IIT study and data available, which we presented to the regulatory agency, and they were amenable of allowing us to have a registrational study from the get-go, combining a short abbreviated Phase I part with the Phase II part, so that is the plan as well now for our regulatory interactions in the U.S. and China for the other compounds and products.

Terrific. A very interesting and aggressive strategy. And then last one for me. Can you comment on -- you have all these IITs lined up for the new products. I guess, maybe my question doesn't make as much sense in the context of your last comment, Martina, but is there a time -- a general time line between the IIT and the IND? However, I guess, if you want to use the IIT data to help you with the leapfrogs and steps in the IND, maybe that's not as relevant to the question.

So you are asking about a gap time between the IIT or how the IIT then goes over without any gap?

Well, originally, I was thinking you do the IIT and then next month later, you would file an IND, and I wondered if there was an acceleration of that time line, as the company gets more experience making products and has more facilities. But it sounds like you're using the IIT really to help sort of bridge over to the IND so that when you file the IND, you can start, like you said earlier, a short Phase II into a registration trial as opposed to starting a classic Phase I dose escalation trial.

Yes, exactly. So if you think about it, we already learn a lot the IIT study, which otherwise, you only learn after you start the Phase I study after the IND. So we already -- when we file our IND know the drug has efficacy, and we kind of understand the preliminary safety profile.

That, by itself, abbreviates the process because we can go in even with the manufacturing process being finalized because now we don't need to wait as some companies do a Phase II or Phase III to finalize their manufacturing process, which then takes longer and may lead to delays later on as regulatory agencies do not like particularly changing manufacturing during the phases of development.

So that gives us a unique advantage here going in right away with the finalized manufacturing. And that is also the discussions then, of course, that are very critical for us. And that is why we decided for other complexity to now file the IND in the first half of 2022.

Yes. Let me just add one small point here for the significance of and all these points well spoken. One minor point, but sometimes could be very important, because our product design is mostly a first human and the risk profile and perhaps also CMC could be at early stage to have finalized the version, so during the IIT, we would have opportunity to patch up and to do compatibility studies if we need to. So that's sort of additional dimensional benefits.

There are no additional questions at this time. I would like to turn the call back to Dr. William Cao for closing remarks. .

Thank you again to everyone for joining us on the call. The Gracell team is very proud of what we have accomplished in the 3.5 years since our funding. We have rapidly expanded our teams in China and in the U.S. with exceptional talents. We have advanced many clinical programs and de-risked others through clinical investigator-initiated trials in China while also expanding our manufacturing facilities to support our extensive pipeline. We look forward to the continued advancement of our clinical programs, and we'll keep everyone updated along the way. Thank you.

Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect.