Precigen Inc (PGEN) 2021 Q2 法說會逐字稿

Good day, and welcome to the Precigen Second Quarter and First Half 2021 Financial Results Conference Call. (Operator Instructions) Please note, 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.

Thank you, operator, and thank you for joining us today.

With me is Dr. Helen Sabzevari, President and CEO of Precigen. Helen will provide an update on the significant progress we have made across our pipeline programs, after which I will review our second quarter and first half 2021 financial results. Following our prepared remarks, we will open the call to Q&A.

Before we begin, let me briefly review our forward-looking statement. During today's call, we will make various forward-looking statements. Investors are cautioned that our forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those indicated by our forward-looking statements. Please read the safe harbor statement contained in this presentation as well as risk factors contained in Precigen's most recent SEC filings for a more complete discussion of these risks and uncertainties.

I will now turn the call over to Dr. Sabzevari.

Thanks, Steve, and thank you, everyone, for taking the time to listen in today. I hope this call finds all of our stakeholders and their families well.

We are extremely happy with our year-to-date progress, achieving multiple clinical milestones in the first half. The Precigen team continues to advance our portfolio rapidly and will remain on track to meet or exceed our stated goals for this year with important clinical milestones and further data readouts anticipated in the second half of the year.

Today, I'm pleased to announce that Precigen will host an R&D Update Call on November 4 dedicated to reviewing progress made in advancing the company's clinical pipeline. This call will feature presentations from our investigators for several of our key clinical trials. Details about the call will be provided in the coming months. In addition, we anticipate further updates at medical conferences in the fourth quarter. I would now like to take you through some pipeline updates.

PRGN-3005 UltraCAR-T is under evaluation in a Phase I/Ib clinical trial for the treatment of advanced, recurrent platinum-resistant Stage III/IV ovarian cancer. Study subjects receive the PRGN-3005 infusion either via intraperitoneal or intravenous infusion. Preliminary Phase I data previously reported from the lowest 2 dose level of the IP arm showed a favorable safety profile with no dose-limiting toxicities, neurotoxicity or cytokine release syndrome, encouraging expansion and persistence without lymphodepletion and clinical activity as evidenced by regression in total target tumor burden. Enrollment in dose level 4 of the IP arm and dose level 3 of the IV arm in the Phase I dose escalation portion of the trial is ongoing concurrently. We are enthused with the overall progress of this program and anticipate the presentation of the interim data from the Phase I dose escalation trial in the fourth quarter of 2021.

PRGN-3006 UltraCAR-T is currently under evaluation in a Phase I/Ib clinical trial for the treatment of patients with relapsed or refractory acute myeloid leukemia or AML. Study subjects receive the PRGN-3006 infusion either with or without prior lymphodepletion. PRGN-3006 was granted orphan drug designation for patients with AML by the FDA. Preliminary Phase I data previously reported for the 2 lowest dose levels in the non-lymphodepletion cohort and the lowest dose level in the lymphodepletion cohort showed a favorable safety profile with no DLTs or neurotoxicity, encouraging expansion and persistence of PRGN-3006 UltraCAR-T and clinical activity as evidenced by reduction in AML tumor blast levels.

As reported at ASH last year, we observed long-term stable disease in a non-lymphodepletion patient with durable persistence. We also reported an objective response, complete response with incomplete hematological recovery in a patient treated at the lowest dose with only 9 million UltraCAR-T in the lymphodepletion arm. Enrollment in dose level 4 of the non-lymphodepletion cohort and dose level 3 of the lymphodepletion cohort is ongoing concurrently. This trial continues to progress exceedingly well, and we anticipate the presentation of the interim Phase I data in the fourth quarter of 2021.

PRGN-2009, our off-the-shelf AdenoVerse immunotherapy designed to target HPV16 and HPV18, is currently under evaluation in Phase I/II clinical trial as a monotherapy or in combination with a bifunctional antibody, bintrafusp alfa, in patients with HPV-associated cancers. The trial is being conducted under the Cooperative Research and Development Agreement or CRADA with the National Cancer Institute. Preliminary data reported from the Phase I monotherapy dose escalation arm showed that PRGN-2009 monotherapy was well tolerated with no DLTs. Preliminary correlative analysis from monotherapy patients treated at the lowest dose showed an increase in HPV-specific T-cell response. Furthermore, an increase in the magnitude and the breadth of immune response was reported with repeat administration of PRGN-2009, highlighting the differentiation of our AdenoVerse platform to generate and boost durable and robust antigen-specific immune responses. We are extremely pleased with the trajectory of this trial to date.

Just to put the progress in perspective, we reported dosing of the first patient in August of last year, during the ongoing COVID-19 pandemic. And in 1 year, we have enrolled 16 patients in this Phase I/II trial. Enrollment in the Phase I monotherapy dose escalation arm is complete, with all patients receiving multiple doses of PRGN-2009, as many as 13 to date. PRGN-2009 treatment was well tolerated with no DLTs, and the recommended dose for the Phase II trial was identified.

Based on these findings, the monotherapy arm of the Phase II trial was initiated. This Phase II trial evaluates PRGN-2009 as neoadjuvant therapy for newly diagnosed oropharyngeal or sinonasal squamous cell cancer patients as a first-line treatment. Four patients have been enrolled in the Phase II monotherapy arm to date, and the enrollment is ongoing. Enrollment in the Phase I combination arm is also ongoing with 6 patients with recurrent or metastatic HPV-associated cancers enrolled to date. We anticipate the presentation of the interim Phase I data in the fourth quarter of 2021.

PRGN-2012 is our off-the-shelf AdenoVerse immunotherapy designed to elicit immune responses directed against cells infected with HPV-6 or HPV 11 for the treatment of recurrent respiratory papillomatosis or RRP. RRP is a rare, difficult-to-treat and sometimes fatal neoplastic disease of the upper and lower respiratory tract. There is no cure for the approximately 1,500 per year newly diagnosed and 20,000 patients living with this disease in the U.S. The current standard of care is repeated surgical removal of papilloma lesions with some patients requiring in excess of 100 surgical procedures. A Phase I clinical trial of PRGN-2012 AdenoVerse immunotherapy in adult patients with RRP is ongoing. This trial is being conducted under a CRADA with the NCI. This Phase I trial is designed to follow 3+3 dose escalation of PRGN-2012 as an adjuvant immunotherapy following a standard-of-care surgical removal of visible papilloma. The study is designed to enroll 3 to 6 subjects at each dose level, followed by an expansion cohort with 12 patients treated at the maximum tolerated dose. Patients receive up to 4 injections of PRGN-2012.

The primary objective of the study is to determine safety and tolerability and recommended Phase II dose of PRGN-2012. Precigen received FDA orphan drug designation for PRGN-2012 in patients with RRP. We are extremely excited about the progress of this trial and potential of this program, especially given the unmet medical need for these patients. In January, we announced FDA clearance of the IND to initiate a Phase I trial. In March, the first patient was dosed. And I'm pleased to announce that we have already completed enrollment in the dose escalation portion of the Phase I trial. Subsequently, we have commenced dosing an expansion cohort of the trial at the maximum tolerated dose, exceeding our goal for this year.

AG019 ActoBiotics is an orally administered, disease-modifying, antigen-specific immunotherapy for the prevention, delay or reversal of type 1 diabetes or T1D. AG019 is currently under evaluation in Phase Ib/IIa clinical trial as monotherapy or in combination with teplizumab for the treatment of early-onset T1D in adults and adolescents. Enrollment and dosing in both the Phase Ib and Phase IIa portions of this study are complete. We were pleased to report that the primary endpoints of assessing safety and tolerability in both the Phase Ib monotherapy and the Phase IIa combination arms of these studies were met. No dose-related adverse events or serious adverse events were reported in either portion of this trial.

In addition, positive top line data from this clinical trial were presented at the Federation of Clinical Immunology Societies 2021 Virtual Annual Meeting by Dr. Kevan Herold of the Yale School of Medicine and principal investigator of this clinical trial. AG019 as a monotherapy and in combination showed a stabilization or increase of insulin C-peptide levels, a biomarker for T1D disease progression. In addition, oral AG019 treatment-induced antigen-specific tolerance in conjunction with the reduction of disease-specific T-cell responses, suggesting the ability of AG019 to modulate a patient's immune system in a precise, antigen-specific manner to address the underlying cause of T1D.

Based on Dr. Herold's presentation, these results are very encouraging and indicate the potential of AG019 to preserve insulin production in a recent onset T1D patient. We are looking forward to advancing AG019 to assess the efficacy of prolonged treatment of oral AG019 for T1D patients. Our investigators plan to present additional data from this clinical trial at the European Association for the Study of Diabetes or EASD 57th Annual Meeting on October 1.

Now I will turn the call over to Steve for an overview of our financial results.

Thank you, Helen.

I would like to briefly review our second quarter and first half financial highlights. In the 6 months ending June 30, 2021, net cash requirements for operating activities reduced [from] $24.2 million as compared to $41.5 million during the same period in 2020, even as the development of our clinical and preclinical pipeline accelerated. This improvement is primarily the result of efficiency measures we began implementing in 2020 and improved performance at both our Trans Ova and Precigen Exemplar subsidiaries, which both continued to be net contributors of capital to Precigen. We expect our net cash requirement to gradually increase in the coming quarters as our clinical programs continue to progress.

We are pleased with the strength of our balance sheet. We began Q3 2021 with $200.4 million in cash and investments. And we reiterate our guidance and anticipate that our cash balance is sufficient to support our capital needs well into 2023.

I'd now like to turn the call back to Helen for concluding remarks.

Thank you, Steve.

Before we conclude, I wanted to provide you with a brief update on our CFO search. We are diligently working with our executive search firm and have identified a number of very highly qualified candidates and will communicate our decision in the near future.

As you can see, we are entering a pivotal phase at Precigen as we head into the latter half of the year, on pace to meet the clinical milestones we laid out in January. We are excited to be providing clinical updates at our upcoming R&D Update Call and scientific conferences as well as announcements around our preclinical pipeline and technology platform.

Operator, you may now open the line for questions.

(Operator Instructions) And it appears our first question comes from Nick Abbott of Wells Fargo.

Helen and team, congratulations on amazing progress for the first half of the year. In terms of 2012, might we expect to get initial data at the November 4 R&D update? And if so, what would you want to be presenting at that meeting? And then I have a quick follow-up as well.

It's great speaking to you, Nick, and thank you for the question. Definitely, 2012 is a program that, as I mentioned, have gone extremely rapidly. We are very excited about this program and the possibility for the patients. And the answer to your question is absolutely. We are looking forward to presentation of the data by our investigator and at the R&D Day, and we will be providing data.

As part of this R&D, the reason that we are very excited about our R&D Day is because we will be covering a number of data outputs on various program, including 2012 and showing, obviously, the Phase I data, which is safety and tolerability, but also speaking to this program and some of the observations on patients.

So not to try and put words in your mouth, Helen, but might you be commenting on need for surgery after 2012?

So I'm not going to say exactly the outline of what Dr. Clint Allen will be speaking about, but we will definitely provide much more color on the 2012 and the mechanisms as well as basically the ongoing results that we are seeing on the patients.

Okay. Terrific. And then just on the ActoBiotics program AG019, I see that now you're committing to doing a clinical trial for longer-term treatment. Was this always the plan? I apologize if it was and I missed that. Or is this the result of feedback from potential licensees or partners? And maybe you can just outline what your thoughts are and goals of this trial.

Sure. So definitely, with AG019 after seeing the data from Phase I, Phase Ib and IIa, it became very clear that the monotherapy of AG019 by itself actually was quite promising. Obviously, the combination therapy was very good, but the monotherapy, with just one cycle of treatment, which is really just 8 weeks of taking orally the capsules, we showed almost similar results. And therefore, this was very exciting. As we have mentioned, this is in discussion with our regulatory authorities. And we are looking forward to move this program forward, obviously, especially as a monotherapy arm with the extended. Since we only have treated these patients for 8 weeks, now obviously, because of the safety profile of AG019, which was very good, we believe that we can extend the treatment and also look into a rapid discussion for basically this, again, the patients that they are in need of treatment in this arena. And we can basically discuss pathways with regulatory authorities to move this program forward.

And our next question comes from Jason Butler of JMP Securities.

I appreciate all the updates. I guess just starting with a high-level question. Can you give us any more granularity on which programs we'll get data from at the R&D event versus which would be data at medical meetings. Obviously, you expect to give 2012 data. But can you give us those details for any of the other programs? And I have a question on 2009.

Sure. Of course, one of the reasons for our date of the R&D is, as you can imagine, basically, the highlight is going to be coinciding with some of the congresses. And we will be giving basically highlights on all of the platforms that we have been discussing and we have already mentioned in our goals for 2021.

And the guidance that we are giving is we will be -- cover the interim data. And obviously, the timing that we have given for early November allows us to provide this data, the follow-ups, especially on some of the patients. And the data has become more mature and will coincide with the clinical congresses and the abstract releases at that time.

Okay. Great. And then for PRGN-2009, can you maybe just talk a little bit about how you're thinking about combination versus monotherapy path forward here? And then given the unmet need in sinonasal squamous cell cancer, could that be an expedited path to approval? And then just can you maybe speak to some of the factors that went in determining dose? And for example, was dosing volume one of those factors?

Sure. So in regard to the PRGN-2009, as was mentioned, this program has moved extremely rapidly. As you can see, we are already in a Phase II. We finished the safety Phase I data, which will be presented as well as the dosing. That really was -- the first primary perspective was looking at any DLTs if we go to higher doses, which we have not observed any DLT. The volumes were not really necessarily the concept here because we originally have thought about in our CMC preparation that obviously design a volume that would be applicable and easy to be given, but mainly is about -- dosing was about, do we see a DLT, which we have not seen on the highest level dose and can the mechanism of action enhance the T cells upon redosing, which, as we have reported, we have seen that. And as part of the call, we just mentioned that we have seen up to 13 to date that we have been able to keep redosing the patients.

So you can see the power of the AdenoVerse platform versus other adenovectors that you can only give them once. And we currently have patients that have received multiple and some surpassing the 13 times that they received this. So we are really excited.

In regard to the path forward for this, you are absolutely correct in the combination. As you know, a lot of the patients in various indications, for instance, specifically in cervical cancer, there is really no path forward for these patients. And we recognize that. And with the power of the AdenoVerse off-the-shelf, we are anticipating and we are discussing pathways with, the path forward, I should say, with regulatory, FDA, to address for a fast tracking this treatment in combination so. And I apologize if I forgot part of your question, if I did.

No. That was absolutely -- that was great, very helpful. Thanks, Helen. I've been looking forward to the R&D Day.

Absolutely. Thank you.

Next up, we have Ben Burnett of Stifel.

I actually wanted to follow up just on an earlier discussion around AG019, and then I had another question on one of the CAR-T programs. But for AG019, have you talked about like the dosing schedule that you would assess here for some of the longer-term dosing? It feels like the data is supportive of daily dosing, but like the biomarker data would imply that you might be able to get away something a little bit more frequent. What are your thoughts around that?

Absolutely. Excellent question, Ben. Definitely, both the safety and the mechanistic data that we have do support perhaps more continuous dosing and more cycles of dosing. And this is exactly what we are discussing with the FDA and how we can, as a monotherapy, based on the safety that we have seen and also the mechanism of action, we can increase the dosing and expand that. So you're absolutely correct. We think that that is the way to go, especially with the data that we saw. Even with one cycle, not only we saw the C-peptide stabilization, but we showed that the autoreactive T cells basically going down, which is exactly what you want, the inhibition of these T cells. And this was just by giving 8 weeks of the oral capsules. So we can definitely expand this to more continuous dosing.

Okay, very interesting. And then a question on just kind of what to expect at this next AML PRGN-3006 update. I guess how should we think about like what we might learn in terms of durability and in terms of the follow-up that we might expect in that AML study? I mean, I'm assuming to some degree this will depend on how long ago patients were enrolled in this study. But just given the way that, that CR was handled in Cohort 1, I guess, do you expect most physicians to likewise just seek a transplant after achieving a good response? Or could we get some data and learn something about the durability of UltraCAR-T at this first update?

Okay. So let me just address the first, what should we expect in our R&D. And definitely, we would be giving highlights and especially that, that coincides also with the embargo being lifted on the scientific presentations that day. What we will be giving is, obviously, the durability, the kinetic between the lymphodepletion and non-lymphodepletion, by the way, and also more view on the clinical activity, which is quite exciting as we are seeing preliminary with what we have reported, and we will be -- continue reporting on those. I think what becomes really important is to understand that at what dose the exact expansion and also the clinical activity.

In regard to the transplant, yes, the answer is, as we have seen with the CRi, the patient had achieved a complete response, this patient would have never had the chance to receive a transplant under normal circumstances. And this patient now received a normal transplant and has gone very well. And so with that in mind, that will be one of the options. But also as we are gathering more information and follow-up on some of these patients that they have been treated, then we can look at other options that might be ongoing, and transplant might be just one option.

And our next question comes from Swayampakula Ramakanth of H.C. Wainwright.

Obviously, interesting progress so far and certainly looking for a number of thoughts. Just a quick question on PRGN-3005, you are looking at platinum-resistant ovarian cancer. As you know, there are a few molecules in play for that specific population. So just trying to see what you think about 3005 and what do you need to show now so that you can quickly move to Phase II and also try to get it to the market at the earliest?

Yes. So for the ovarian cancer, as you can imagine, we are currently concurrently dosing both intraperitoneal and IV, especially at the dose level 3 IV and dose level 4 intraperitoneal, which by implementing the UltraPorator, this has allowed us to scale up. And what is going to be very interesting is the comparison of these 2 arm and looking at not only the, obviously, safety and tolerability but also expansion, persistent and the signs of clinical activity. Where having said that, we have every intention to move this very rapidly to Phase Ib. And in that setting, obviously, we will have the number of the patients that we can evaluate the effect and the clinical activity on a number of the patients.

To the point that you have raised, obviously, this is a very, very difficult patient population. Even with the newest therapies that are coming, still the rates of any objective responses are extremely low. And we are looking forward to obviously generating the data as soon as possible that we can have the discussion with the regulatory group.

One aspect that is very important to remember, and I think our investigator, Dr. Disis, always refers to this, is the point of doing this safety and tolerability as well as getting our kinetics is also to move this to a much faster to the front line for the treatment of this patient as opposed to the standing and waiting for a Stage IV. Because the power of the immuno-oncology, as you know, all the treatments and especially in this cell and gene therapy becomes even much more obvious as we move it front line.

For instance, I can point out to our PRGN-2009, which we did the Phase I, and our Phase II is in the front line immediately in the adjuvant setting. So in the patients that they basically have been diagnosed and they are receiving treatment and receiving our treatment as an adjuvant. So that is our intention. And for sure, we are moving this rapidly. And we will be analyzing the data from IV versus the IP and then especially for the expansion phases and which arm would go much faster, those are the decisions that will be made.

(Operator Instructions) The next question is coming from Justin Walsh from B. Riley.

Can you maybe give us a qualitative sense of how well tolerated PRGN-2012 was? That is, did you complete the dose escalation so rapidly because you very quickly hit a DLT or did you have very rapid enrollment?

No. Actually, the safety profile of 2012, of course, I'm giving away some of this. But the safety was very good handled, and we have not hit the DLT. And at the same token, part of the rapid enrollment, as you know, it was 3 to 6 patients per each dose. And for our audience, usually, it's 3 to 6 in case that you need to add more patients or there are adverse events or there are DLTs that you have to go back. And obviously, we didn't have to go to 6 per dose. We had the 3 plus 3 we enrolled very rapidly and with a very good safety profile. And now we are in expansion phase, as I mentioned in the call.

Got it. I'm glad I got you to give something away. I'll give you one more on a high level. Maybe you could just give us a little commentary on any ongoing BD efforts you have? Are you actively looking to acquire additional assets right now? And if so, is there a specific drug profile or indication that you're interested in?

I think at this point, we are really focusing on our portfolio. And we are very focused for this year to very, very rapidly move our own portfolio forward and not only from perspective of taking it to the next level of the clinic, but also strategically how we manage our portfolio, and that's our focus for this coming year.

(Operator Instructions) Our next question is going to come from Eric Joseph from JPMorgan.

Just a couple on AG019. I'm curious to get a sense of whether at this point, it sounds like you're contemplating a monotherapy path forward towards further development and potentially pivotal. Is that correct or is there a combination regimen that you'd want to evaluate further? And then secondly, as it relates to the Phase Ib/IIa data that you recently reported on, can you talk about, I guess, glycemic control or stabilization of A1c to the extent that you track the measure? And is that something that we should be looking forward to at EASD?

Yes. Great question. Thanks, Eric. So in regard to, definitely, we are pushing forward our monotherapy. And the reason for it is based on the data that we saw with a very limited cycle of treatment. It's 8 weeks of only treatment. And after a follow-up for 12 months, we saw not only the stabilization of C-peptide, the mechanism of actions of basically increasing our T regulatory cells that inhibit the autoreactive T cells, reduction in autoreactive. So basically, we saw parallel results that we had seen preclinically, which is very encouraging.

And knowing the safety profile of our molecule as was presented in Phase I and Phase IIa, clearly, that allows us to now be able to move to more of dosing or longer periods of dosing. So that is obviously one path.

In regard to the combination, of course, that is also an arm that we are considering and we will follow because we also showed that there was a synergistic expansion and advancement. So for us, basically, we can see that that also was very helpful. But in general, we would follow both, but we are very excited about our monotherapy.

Another aspect was, as we reported, the HbA1c was stabilized, which is, this is another biomarker that is very important in the T1D patients. So collectively, when you put all of that, we decided that we have a good path with our monotherapy. As you know, with other treatments, with the antibody [even] treatment, you have to treat for 12 days. It's in the hospital, and it's associated with still immunosuppression. Whereas with this AG019, this is just capsules that the patients take at home, they use very easily and with a very good safety profile. And by the way, it allows the mechanism of action. So for those reasons, this is how we have prioritized and we are moving with AG019.

This concludes our question-and-answer session. At this time, I would now like to turn the conference back to Ms. Helen Sabzevari for any closing remarks.

Thank you for taking the time to listen to our call and for the thoughtful questions. We look forward to providing updates at upcoming R&D Day and investor and scientific conferences. I wish everyone to stay healthy and safe. Thank you, operator.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.