Precigen Inc (PGEN) 2023 Q4 法說會逐字稿

Good afternoon, and welcome to the Precigen full year 2023 financial results and update call.

(Operator Instructions) Please note that this event is being recorded.

I would now like to turn the conference over to Steve Harasym, Vice President of Investor Relations.

Please go ahead.

Excuse me, Mr. Steve Harasym.

Please go ahead.

Excuse me, Steve.

Please go ahead.

Thank you and I apologize for any technical difficulty here.

Again, welcome to our 2023 full-year financial call.

With me is our CEO, Helen Sabzevari; CFO, Harry Thomasian; and Jim Shaffer.

Please refer to our most recent filings for our forward-looking statements.

With that, I'll turn the call over to Helen.

Thank you.

Thank you, Steve, and thank you to everyone for joining us.

And again, apologies for this little bit of technical problem, but I think we are going through a very, very transformative year. 2024 is poised to be a transformational year for Precigen.

We are on track to present a pivotal Phase 2 data for our lead asset PRGN-2012 in Q2 and intend on submitting our BLA in the second half of 2024.

This is due in part to the positive guidance and pathway provided by the FDA and to the tireless work done by our team over the last several years, starting from discovery in 2020, all the way to the potential filings in 2024.

For today's call, I will focus on our AdenoVerse platform, and we are working rapidly and prudently to advance our -- obviously our UltraCAR asset, and we are looking forward to the data readout later on this year for UltraCAR platform, as we outlined in today's press release.

So for today, let me just jump into the AdenoVerse platform, why we are excited about this platform, and our lead assets that it pays off.

For those of you who might not be familiar with this platform, this is a very differentiated platform from the rest of the viral platforms.

Why do I say that?

it's very simple.

First of all, this platform is built based on the library of the gorilla adenovector.

These adenovector are not unlike other adenovector.

First of all, they have a high capacity that you can put number of genes in that.

But more importantly, they have the ability because there is no pre-immunity in humans or very little.

You can keep dosing this -- with this vector.

With all of the viral vectors, when you dose one or at best twice, you're getting this neutralizing antibody, which eventually inhibited new responses.

And then after a while, you are just shooting it black.

That's one of the major issues in the vectors -- other vectors and other platform services.

Here, on the other hand, because we don't have pre-immunity today, you can keep on giving and because of the design of these factors on the specific in biological nature of these vector, now even when there is a neutralizing antibody kept at bay and doesn't enhances.

Why do I say that?

We have a clinical data actually from -- in various indication that you can be dosing the patient and we have dosed some of the patients up to 18 times.

And not only you have kept enhancing the immune responses, but you have kept the neutralizing antibodies uptake.

And finally, one other aspect of the platform, which is very important, is their specialized manufacturing process, which allow high titers.

And you can imagine that becomes very important, especially in commercial manufacturing process.

So let's dive into our lead asset, which is our PRGN-2012.

Our PRGN-2012 has been designed to identify the epitopes of HPV 6 and 11 and target the cells that are infected with this virus.

Why is that important?

In a rare disease of basically RRP or recurrent respiratory papillomatosis, the root cause of this disease is the infection HPV 6 and 11 infections in these patients, which therein causes these benign tumors under vocal cord or in the trachea of this patient.

Therefore, they can't talk or they can't breathe or both.

These patients for decades have gone through the devastating disease with really no treatment except surgery.

What does surgery do?

Keep removing this benign tumor, it's like mowing the grass and then they keep coming back.

And as a result, the patient -- first of all, it gets worse, the situation.

There is a danger, and there is a continuous problem that you have not solved.

In order to really address this disease, you have to get to the root, which means what?

Means that you have to address the infection, underlying HPV 6 and 11.

And this is exactly what we designed PRGN-2012 to do to awaken the immune responses of these patients to identify the cells that are infected and cause their benign tumors to grow and then to destroy them.

And based on that, what we have done is looked at the number of the patient.

In United States, there are estimated between 15,000 to 20,000 patients.

Ex-US, you are looking at excess of 125,000 patients.

So as we mentioned, this is truly a devastating disease with no current treatment.

When we started our trial with PRGN-2012, we first of all designed the trial that the patient -- they have the history of the patient in 12 months prior to receiving their vaccine.

And then these patients, they received a course of four vaccination within 85 days.

And then after that, we have been following these patients to see for the recurrence of this benign tumor.

In a single-arm Phase 1 pivotal trial that we run originally, what we observe was, first of all, from a safety perspective, these patients have a very favorable safety, mainly Grade 1, Grade 2, which is some rashes at the site of injection or fever, and then it resolved within a day or two, very similar to the flu shots that you get.

Secondly, one thing that was very specific about our design for this vaccine is that it's given subcutaneously in the arm or leg, again similar to the flu shot.

We don't require any kind of a device.

We don't require anything.

It can be done in any office of any of these physicians, right?

So now, what we saw, besides the safety and the endpoints that we had put, we decided to go to the most severe patient population.

What do we mean by that?

We defined that and our KOLs and investigators have defined that as patients that at least require three surgery in a prior year.

Actually, the average number of surgeries that our patients had enrolled was upwards of six surgery per year.

So you can imagine every couple of months, these patients had a surgery.

Some of them, they have 10 surgery in a prior year.

What we observed was after the follow up of 12 months, 50% of these patients did not require any surgery and we refer to them as a complete responder.

If we look at overall patient population that they reduced their number of surgeries, we are looking at 83% response rate.

Okay.

Now, when we look at the immunological responses of these patients, the patients that they had a complete response, they have a significant increase in the immune responses to HPV 6 and 11.

And this is exactly what the mechanism of these vaccine is all about.

At the same token, one thing that we have to say, we have been following now these patients for more than 12 months.

Actually, these patients are in full response and they are upwards of 24 months.

This is two years after vaccination.

And again, I'm going to stress, severe patient population with the average number of surgery six mean average, right?

So when we look at also, we have -- based on the data, the safety, the efficacy, the FDA last year for the first time in the history of any company has given us a breakthrough designation as well as accelerated path and agreed that our single-arm pivotal Phase 1 data plus a single-arm Phase 2, which we haven't started, can act as pivotal and based on that, we can submit a BLA.

So as we have mentioned last year, we finished enrollment to our Phase 2, and we are really excited that we will be presenting the full dataset of our Phase 2 by the end of Q2.

We already have published, in prior translational, our complete Phase 1 data and the mechanism of action of that.

And we are poised to submit our BLA in the second half of this year.

And we have received an agreement from the FDA that we have an enrolling BLA.

So as you can imagine, this is quite exciting and also a proof of concept for this platform.

Simultaneously, we have been advancing another molecule, PRGN-2009, and that has been already positioned in HPV 16 and 18 cancer, head and neck cancer, cervical cancer.

And the Phase 2 studies in head and neck had been initiated last year, and we are currently enrolling and recruiting patients to this arm of head and neck with the early onset of the disease, and this is quite exciting.

Why?

Because when you look at head and neck, the response rate of the patient, even to that checkpoint inhibitor, has been 18%.

So there is a wide gap here for improvement.

Last year at ASCO, we showed that when we treated HPV-related cancer patients.

These are Stage 4 patient.

These patients had -- basically, we had 30% objective responses, partial responses, complete responses.

And the complete responses, they were durable.

We had over a year, for instance, now response in some of these patients.

This is in a patient population that, I stress again, checkpoint inhibitor in cervical cancer at 15% and then they fell for in head and neck, 18%.

So now positioning PRGN-2009 in a head and neck in combination with pembro, in an early onset, it's quite exciting time.

And this trial is recruiting and we have enrolled patients to this arm.

Simultaneously, we moved this asset towards the cervical cancer.

Last year, we received an IND approval from FDA to open the Phase 2 study in combination with pembro in a relapse metastatic cervical cancer patient.

And currently, as we speak, we are recruiting to this trial.

And this is quite exciting.

So as you can imagine, this platform with the differentiation that it has from all the other platforms, with the efficacy that has shown, and in our lead PRGN-2012 were based on its safety, clinical efficacy, and also in discussions with the KOL and investigator, their high excitement about this molecule for this rare disease because of ease of administration, because of efficacy of clinical response, and the durability of response has generated a lot of excitement and really have positioned us to become a leader in treatments for this rare disease.

So with that as a highlight, I would like to now actually transfer to Harry Thomasian to give us, our CFO, an update on our financials.

Harry?

Thank you, Helen, and good afternoon to those on this call.

We appreciate you participating.

As Helen mentioned earlier, 2024 is shaping up to be a transformative year for Precigen.

We are all well on our way to completion of our drug substance manufacturing facility here in Germantown, Maryland, and with the hiring of our Head of Commercial Operations in September of this past year, we are continuing to build out our commercial function and plan to be ready for the expected launch of PRGN-2012 in 2025.

In addition, we anticipate that there will be multiple value-inflection points in 2024, starting with our data readout on PRGN-2012 in the second quarter of this year.

As we approach the end of the first quarter of fiscal '24, we're continuing to exercise sound financial management, preparing for the planned launch of PRGN-2012 in 2025 and continuing to move our other programs rapidly through the clinic, all while maintaining efficient SG&A operations.

So with that in mind, I'd like to spend a few minutes highlighting certain aspects of our financial results from 2023.

In 2023, our research and development expenses were $48.6 million, an increase of 3% or $1.4 million from the prior year.

This was primarily due to additional investment in our personnel, mostly through adding additional headcount to support the growth in the company's development activities.

Our continued focus on SG&A costs resulted in a decrease of 16% or $7.6 million from the prior year to $40.4 million for the full year of 2023.

This was due primarily to reduced legal and insurance costs and was achieved while we began to build out our commercial group.

We filed our 10-K with the SEC just prior to this call, and you can find more detailed financial information in the financial statements, which are included in the 10-K.

In addition, we are continuing to evaluate various opportunities in our current -- and are confident in our ability to strengthen our balance sheet as we approach the planned launch of PRGN-2012 and transitioning from a clinical- to a commercial-stage company.

This concludes our prepared remarks for today.

I'll now turn it over to the operator for any questions.

Thank you.

(Operator Instructions) Jennifer Kim, Cantor Fitzgerald.

Her line dropped.

Jason Butler, Citizens GMP.

Hi.

Thanks for taking the questions.

And congrats on all the progress.

So two for me.

First of all, in terms of the PRGN-2012 Phase 2 trial, can you maybe just compare the trial design here, patient population, anything about trial conduct to the Phase 1 study that we really have the data from and any differences?

And secondly, Helen, at this point, any more color you can give us on the design of a confirmatory study that you would conduct for 2012 assuming you got accelerated approval?

Thank you.

Hi, Jason.

Thank you.

Excellent question.

So in regard to the Phase 1 and Phase 2 study, actually the design is exactly the same.

And this is why FDA has allowed us to combine the Phase 1 single arm and Phase 2 single-arm and consider that as a pivotal.

So we are really excited about that.

There was no different design between these two.

And this will total a 35 patient that data will be reported on.

In regard to the confirmatory trial, also, we have the full agreement with the FDA already that the confirmatory trial would exactly duplicate what we have done in a single-arm Phase 1 and Phase 2.

So it's the exact same design.

However, one interesting point here and I think it's very, very important that based on the safety and the efficacy that we showed and the FDA has seen that data, FDA has recommended that we also consider an arm -- this is not a requirement for the confirmatory.

This can be separated or get done differently.

However, or we can even add it to the confirmatory trial, if we wish to.

But for a repeat dosing, because the consideration that the other 50% of the patient that they didn't go to a complete response, however, they benefited and they reduced the number of surgery, they might be able to go towards the complete response.

And we are really excited about that.

We already have the design of confirmatory based on what we have designed before.

And clearly, upon our BLA submission, our confirmatory trials will start going to be initiated simultaneously.

Jennifer Kim, Cantor Fitzgerald.

Hey, can you hear me?

Yes.

Hi, Jennifer.

Oh, perfect.

Sorry about before.

Maybe just start off, have you decided on your plan in terms of the format or venue for presenting the Phase 2 data?

And then my second question is just from a commercial readiness standpoint, can you give more color on the manufacturing side and how much capacity do you anticipate having a timing of a potential launch?

Thanks.

Absolutely.

Thank you, Jennifer.

So from the -- obviously, we are looking at various options that we have and we will give a little bit more guidance as we get closer.

But clearly, we are looking forward to presenting the full set of data on our Phase 2 and our investigators, also similarly.

So we will be guiding soon.

In regard to the commercial readiness on commercial facility, it actually is exactly moving according to the plan.

And we will have a capacity that at the time of launch to meet not only the number of the patients and actually we have by then have generated in thousands of doses that the patients can be treated with.

So we are confident that we can meet the needs of the commercial, basically force and our patients as we move forward.

Okay.

That's helpful.

And maybe to follow up on what you said before on the arm please to look at repeat dosing, is there any sort of data or feedback that you're waiting on before you pull the trigger on making that decision?

No, actually, that is the arm that the design has been up to us because that is not a requirement for a confirmatory from FDA.

Our confirmatory trial is already agreed by FDA, and it's actually in the process, as I mentioned.

Upon our submission of the BLA, we also have initiated that going forward.

The repeat dosing is what we have designed in conjunction with our investigators.

And in that, we will also add as part of a confirmatory as another arm.

But then again, that is not a requirement by the FDA.

This is additional to expand our label and as well expand the patient population that they can benefit from repeat dosing, especially with the durability that we see currently, which is more than two years.

Swayampakula Ramakanth, H.C. Wainwright.

Thank you.

This is RK from H.C. Wainwright.

Good afternoon, Helen and Harry.

So I have one question on 2012.

In terms of from commercializing the drug, can you give us some of the aspects of it in terms of like sales folks and what is the strategy there?

And it being an orphan disease, do you -- I mean, do you focus on some specific centers where this is being treated?

Just some of the dynamics of that, please.

I'm going to ask Jim Shaffer, Head of our commercial to actually give color to that.

Jim?

Thank you, Helen.

We have recently completed primary and secondary market research to better understand not only the patients, but also the physicians and the prescribers who currently manage the RRP patients across the US.

And what we continue to identify is that it's a relatively small group of specialty physicians, primarily laryngologists, which are subspecialty ENT physicians, that are managing a large majority of patients.

So we will be able to create, hire, and train a specialty sales team focused in the major metropolitan areas and very efficiently be able to increase awareness, launch, and then promote our products, once approved.

Okay, thanks for that.

And then going off onto the UltraCAR-T cell therapies, the 3007, where you're doing a dose escalation study now and hoping to present some preliminary data.

What sort of data would we see in terms of like the dose ranges?

And also, how soon can you get into Phase 2 based on what you get to see from this portion of the study?

Thanks, RK.

So in this trial, actually based on prior trials, we are -- there is a two-dose cohort here.

However, this is an umbrella trial as we have mentioned before.

That basically means we are addressing a number of indications, both hematological as well as solid tumors, especially the triple-negative breast cancer.

This can be very exciting.

And what we are looking and the guidance that we have given, we will be giving some updates on the interim data by the end of 2024.

And we will be moving upon the dose selection as well, obviously, finishing all of the safety.

And then, the trial moves to the expansion Phase 1b.

And again, those are the discussions that based on the data that we will see we will have with the regulatory body the similar type of things that we currently have been -- for instance, our AML, which is in a patient population that they really have no other option in front of them.

And as you are aware, other CAR-T and TCRs have not been able -- or even the off the shelf have not been able to enter into that arena.

And also, small molecule inhibitors, unfortunately, it addresses only certain percentage, 67% of the patients that they have those mutations, for instance, inflect rate.

And as we have seen based on the data, those patients, unfortunately, after a year also, there is a mutation in their tumors and they relapse and they have to look for other options.

So I think we are really excited about that and our CAR-T and the results that have been showing.

And then, we will be -- as we have given the guidance, by the end of 2024, we will present the data on expansion.

Brian Cheng, JPMorgan.

Hey, guys.

Thanks for taking our questions today.

First one is on the RRP platform.

So based on your market research, how should we think about the initial adoption trajectory within RRP, If you' were approved today?

Is there are a lot of pent-up demand?

Or do you think that this will be a small build over time type of launch?

And I have a quick follow-up.

Thank you.

Okay.

I think, Brian, I'm going to let Jim Shaffer answer that I can add to that as well.

Yeah, Brian, thanks for the question.

As I mentioned earlier, we recently completed a commercial market assessment for the US and the rest of world markets for RRP and for PRGN-2012.

We feel like the overall uptake, it's going to be relatively swift because a large majority of the patients are sitting and managed by a relatively small number of laryngologists across the US.

So as we educate and increase awareness about the product availability, we think that's going to be relatively quick with those physicians and patients.

So whether it's three- or four-year uptake curve to peak, and then with some level of re-treatment that occurs for the rest of the overall sales build over time.

Does that answer your question?

Yes, it does.

So maybe just on expenses, how should we project sales-related expenses as you prepare for the launch?

Any color on the projected cash runway?

And what is the latest update on the partnership for UltraCAR-T?

Okay.

So I can take some of this, and then definitely, Harry can add to it.

In regard to -- as Harry mentioned, we are looking at the various strategies for basically supplementing our financial balance sheet.

And we are confident that we have been -- moving forward, we have that ability.

In regard to the UltraCAR-T, actually, I'm glad you asked that question because as you can imagine, especially with evolution and the scenarios that have happened, we saw all in the past six months the change of the label, even in approved CAR-T for the reason that the classical CAR-T, unfortunately, some of the patients have come down with cancers, all associated with CAR-T.

And now, that has to be projected in the label at the same token.

Now as we put another cloud on the field of autoimmunity using the classical CAR-T because in a cancer patient, of course, you are dealing with indication that the patients have no option and they have no other treatment.

On the other hand, when you're looking at the chronic diseases such as lupus or autoimmunity, clearly, now you have to have a very, very safe drug.

Because number one, these are not patients that are at Stage 4.

These are patients that they can live for a long period of time.

And secondly, most probably, they have to be redosed over their chronic disease.

So in that setting, you have to have two phenomena.

Number one, the state to ensure that someone that would have had otherwise a log life.

You cannot be exposing to the scenario that they might develop cancer as a result of the treatment that they receive.

Number two, the costs, it becomes very, very important, especially in chronic diseases because as we can see currently even the cost in a cancer indication is not bearable on our system.

Left alone, now you go to the chronic diseases.

For those reasons, the platform that we have developed and it's moving forward.

And by the way, across the indication, we have now treated more than 70 patients in the platform.

And number one, the ease of the manufacturing overnight at the hospital, which then does not require the costs that are associated, as you can imagine, with centralized manufacturing.

And number two, the design of these CAR-Ts that we have currently which do carry safety switches within them, with under -- if anything goes wrong, you can eliminate these cells.

Thankfully, we have not to activate these cells, but obviously, we have done all of the preclinical studies.

And of course, these were part of our IND packages that was given to FDA.

And I think this is advantage that currently our CAR-T and the combination of those two factors, obviously, have created a lot of excitement and also attention.

So we will be updating as we move forward in regard to our basically partnership activity.

But this is going to be a very exciting year for us.

And Brian, I'll touch on your question around cash runway.

I'll start with the historical cash burn.

So last year of 2023, our cash burn was about $68.5 million or an average of about $5.7 million per month.

There will be some increased expenditures with the build-out of commercialization and manufacturing capabilities.

But through financial management, we're trying to reduce spend in other areas of the company.

I will go back to my prepared remarks and reiterate that we're continuing to evaluate various opportunities, and we are confident in our ability to strengthen our balance sheet as we approach the planned launch of PRGN-2012.

(Operator Instructions)

I see no further questions left.

Lester, let's turn it back to Helen for concluding remarks.

Thank you, operator, and thank you to all of those that joined us for our update call today.

As you can see, 2024 is poised to be a transformative year for us at Precigen, especially as we transition from a clinical to a commercial company.

With pivotal Phase 2 data underway and the plan to submit a BLA in the second half of this year, we are poised to deliver health to patient population with no alternative and driving shareholder value.

We look forward to communicating further in the coming weeks and months.

Thank you again for joining us.

Ladies and gentlemen, this concludes today's conference call.

Thank you for joining.

You may now disconnect.