Alaunos Therapeutics Inc (TCRT) 2017 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the ZIOPHARM First Quarter 2017 Earnings Conference Call.

(Operator Instructions) This call also may be recorded.

I would now like to turn the conference over to Amy Trevvett, Vice President of Corporate Communications and Investors Relations.

You may begin.

Thank you very much, and thank you all for joining us today for ZIOPHARM's first quarter 2017 earnings conference call.

Leading today's call will be Dr. Laurence Cooper, Chief Executive Officer.

Also joining us on the call for the question-and-answer session is: Dr. Francois Lebel, Chief Medical Officer; and Caesar Belbel, Executive Vice President, Chief Operating Officer, Chief Legal Officer and Secretary.

Before we begin, as outlined on Slide 2, let me remind you that during today's conference call, we will be making forward-looking statements that represent the company's intentions, expectations or beliefs concerning future events.

These forward-looking statements are qualified by important factors set forth in today's press release and the company's filings with the SEC, which could cause actual results to differ materially from those in such forward-looking statements.

Information discussed on today's call is accurate as of today, May 1, 2017, only.

With that, I'd like to turn the call over to Dr. Laurence Cooper.

Thank you very much, Amy.

Welcome, everybody, to our quarterly call.

Slide 2, as Amy explained, is our forward-looking statements and, of course, it has more details on ZIOPHARM's website if you're interested.

Slide 3. So I want to spend a few minutes with you on this call talking about how ZIOPHARM is engineered for success.

Indeed, our competitive edge in cell-based therapies.

So let's just take a moment now on Slide 4 and look at the totality of technologies that needs to be embraced, if one was to be successful in the CAR-T and indeed, in the TCR space.

In other words, the space for the genetic engineering of therapeutic T-cells.

Well the first, on the upper left, is how does one manage cost.

When seeing the numbers in the lay press, where these large numbers are associated with the cost of goods of generating genetically modified T-cells.

The company that understands how to manage those costs will essentially trump the headwinds of payers and of hospitals that are having to negotiate essentially how to deliver on the expectation of patients.

We at ZIOPHARM have made major headway in essentially managing the cost of therapy as I'll share with you.

On the upper right, you see the cost -- excuse me, on the upper right, you see the control after infusion.

In other words, how is it that investigators and patients alike can control their T-cells after they've been infused?

For instance, if T-cells are given to a patient with a lot of malignant B-cells, these B-cells, of course, expressing CD19, then those infused T-cells are synchronously activated, and it becomes like a runaway engine.

Those T-cells then take off, proliferate in an uncontrolled fashion.

And while there has been dramatic antitumor responses, including in our own work, those patients are at risk for toxicities, for instance, cytokine release syndrome.

And we've seen some of the difficulties that others have had managing that type of toxicity.

So as I'll go through this presentation, I'll explain to you how ZIOPHARM is meeting the need of the community to be able to control T-cells after they're infused.

On the bottom left addresses the major issue of how it is that one can scale one's technology.

In other words, the CAR-T therapy space is anticipated to grow.

There's anticipated to be great demand for these products, like CD19 directed therapy and other directed therapies.

How is it that (inaudible) such as ourselves are going to be able to scale for the future?

Here again, as I go through the slide deck, you'll see our solution.

And then on the bottom right.

How can we avoid lymphodepletion?

As you know, chemotherapy is given to the recipient before the infusion of T-cells to prep that patient, so they're a better receptacle for the infused T-cells.

So why is it that in 2017, we are marrying state-of-the-art cell therapy with 1950s technology?

ZIOPHARM has a solution for this and I'd like to explain.

So let's look at these solutions together on Slide 5. So in order to be able to manage cost, we have avoided essentially the expense and the complexity of viral-based therapies by advancing in the human this nonviral approach to gene therapy.

In other words, we use DNA plasmids to genetically program the T-cell to express a gene of interest, for instance, our cytokine or our chimeric antigen receptor.

This DNA technology provides a major competitive advantage compared to using the viral-based approach.

It essentially allows us to move faster and cheaper than others.

Again, we're addressing how does one manage cost.

On the upper right-hand side of the slide, you see the RheoSwitch Therapeutic System, or sometimes we shorten it to be RTS.

This is the -- the system that we have employed successfully now in the clinic to be able to control on and off a gene of interest, for instance, IL-12 as I'll show you in a few minutes.

But importantly, it's not only the on-and-off switch that one needs in human biology, but it's also to be able to alter essentially the amount of expression.

And as I'll share with you, we have robust data now in humans that definitively shows that we can use a small molecule, which happens to be a drug called veledimex, that patients take by mouth.

And then the amount of veledimex they take essentially drive the relative level of IL-12 or the gene of interest.

So in other words, ZIOPHARM has a switch.

And this is all-important essentially for our ability to be able to control T-cells after infusion.

On the bottom left-hand side is our new technology that we're advancing around point of care, and this is a solution for manufacturing.

And this is really the idea we have to be able to answer the all-important question of how does one scale one's manufacturing approach.

Some groups are investing in large, dedicated infrastructure around centralized manufacturing.

Others, like ourselves, have embraced the idea that why would one want to grow T-cells outside of the body when you can grow T-cells inside the body.

Why does one have to take the time and the expense, therefore, to propagate T-cells in large manufacturing facilities, when the natural receptacle for T-cells is the human being.

So we've cracked the code, if you would, for our ability now to do this point-of-care manufacturing, this very rapid production of T-cells using our scalable solution, which we refer to, again, as point of care.

On the bottom right is the answer for how all of this works to avoid lymphodepletion.

So lymphodepletion, as I've alluded to, and as actually will look at a little bit later in the slides to come.

Lymphodepletion essentially is the preparative regimen that prepares that recipient for the infused T-cells.

When that chemotherapy is given to the recipient, it essentially suppresses the natural T-cell mass in that patient.

In other words, it lowers your counts.

It lowers your lymphocyte counts.

As a result, the IL-15 that had been soaked up by the endogenous immune response is now liberated and free, essentially, so that the infused T-cells could be bathed in that pool of freed up IL-15.

But why would one want to do that, when one can generate T-cells that have their own IL-15?

Because if you have your own IL-15, as we will demonstrate, one may not need to lymphodeplete the patient.

In other words, you don't have to take the patient through chemotherapy prior to the infusion of our CAR-modified T-cells.

So on Slide 6, we want to show you some high level of how we've actually achieved success.

So this idea of managing costs through the Sleeping Beauty system has already had success in clinical trials.

We have had a first generation technology that has demonstrated the ability for patients to have an antitumor response.

It's demonstrated the ability of the Sleeping Beauty modified T-cells to engraft and persist in patients.

And then we've gone on in our second generation technology, where we've shortened the manufacturing time and again, shown success.

So there's no doubt that the Sleeping Beauty system is the most advanced, nonviral approach in clinical trials, and there's no doubt that it's had success.

On the upper right, the RTS system or the RheoSwitch system, this has also had success.

As I'll share with you, we've had a major move forward in our adenoviral program, where we're treating patients with recurrent gliomas.

This is proof positive that, that switch system works, and it's essentially -- is the platform by which we can lift the switch out of that particular vector system, that adenoviral vector system, and paste it into the T-cells using the Sleeping Beauty system, so now we can have control of T-cell biology.

So there again, we've had success in clinical trials.

Our point of care manufacturing solution is built on, really, a long period of work now in the laboratory, and we've been able to declare success in the laboratory science, because we can definitively show in our mouse models that T-cells can be genetically modified using the Sleeping Beauty system, to express this IL-15 molecule and immediately go into the mouse and rid that mouse of leukemia.

Again, this points essentially the way forward now for clinical trials.

And now, our IL-15 molecule, which we refer to again as membrane-bound IL-15 or tethered IL-15, this idea that the T-cells themselves can bring their own IL-15 to the war on cancer.

This IL-15 molecule, again, has shown success in preclinical studies as we've published several times over the last several months.

So turning it now on Slide 7, one can wrap it up into what these solutions look like for point of care.

In other words, this very rapid manufacturing of T-cells for the purposes of infusing CAR and TCR-modified T-cells into humans.

It hinges on the Sleeping Beauty system, the nonviral gene transfer, to express the RTS.

Under the control of the RTS is the membrane-bound IL-15.

Also, the Sleeping Beauty expresses the CAR, or the TCR, for instance, for part of our neoantigen program.

So you can see now how all this wraps up where ZIOPHARM has solutions to some of the major problems facing the CAR-T world.

In other words, how does one get a handle on the cost and the control of genetically modified T-cells.

In Slide 8, I provide a compare and contrast to where ZIOPHARM is on the right-hand side, using nonviral gene transfer to express our CAR, whereas other companies are using viral-based, in other words, lentivirus or retrovirus, to genetically modify their T-cells to express the CAR.

So let's just look now, one, two, three, on the left-hand side with a viral-based approach.

When one uses a virus in the GMP setting to generate clinical grade T-cells, one has the cost essentially to make the virus and then one has the costs associated with propagating those T-cells in the GMP facility.

And that represents a substantial ongoing investment for this particular tactic.

On the second issue, the second headwind, if you would, for the viral-based therapies, is that the infusion of these CAR-Ts cause major toxicities due to the lack of real-time control of T-cells after administration.

Here again, I'm alluding to the cytokine release syndrome and the cytokine storm that happens when you have T-cells that are runaway in the human.

And the third is the current need for lymphodepletion.

And again, this increases the cost and the risk due to the need to free up the body's own cytokines, perhaps the most important one of those cytokines being IL-15.

On the right-hand side, I've now in a 1-2-3 format, essentially answered the concerns.

So the first is that we're not using virus, we're using the nonviral system, to put in a variety of genes like the CAR and the membrane-bound IL-15.

And again, this provides a solution for growing T-cells in the patient rather than having to build large manufacturing facilities to grow up the T-cells in centralized facilities.

On bullet two or point two, the RTS is clinically proven now.

It's a clinically proven switch that we have gotten to work in the adenoviral system and now we're adapting it to work in the T-cells so that we can regulate the behavior of the T-cells by dialing up and down the expression of membrane-bound IL-15, and to be able to control the level of IL-15 so we can customize essentially the T-cells that are being infused for that particular patient's need.

And then the third bullet point is because we are able to hardware in membrane-bound IL-15 with the coexpression of the CAR, we may be able to avoid the need for lymphodepletion.

These technologies that are now encapsulated around the idea of point of care, represent a generational advance, a major step forward essentially as ZIOPHARM moves its technologies forward for the infusion of CAR-modified T-cells.

Slide 9 reflects a little bit, just reflects back on the history now.

I've been in the CEO's chair for 2 years.

It will be my anniversary coming up mid-May.

And what have we been doing over this last 2 years?

And now it's like essentially, you can see the grand plan starting to come into focus.

When I first took the helm, we had an academic program, an academic program which we called first generation CAR, in which T-cells are being made with our partners at MD Anderson.

But it was a being made where the T-cells were generated on these feeder cells, and it took a number of weeks to generate those technologies.

Even so, we were able to declare success.

Even so, many patients now have benefited from that first-generation technology.

Again, the T-cells are -- can be seen in the patients and the patients are in remission.

But as we transitioned, as I transitioned to the company, I recognized that we needed to shorten the manufacturing time, and that we've done.

We've gone from the 4 weeks that are associated with the first generation CAR, now to where we are approaching 2 weeks with the shortened manufacturing approach.

Again, we've had success, and I'll show you, for instance, a patient who's benefited from this shortened manufacturing.

So these 2 anchors, if you would, in the first generation and the second generation CAR, demonstrate that we can do nonviral gene transfer, and that if you would, shorter is better.

The amount of time and culture that T-cells are being generated is better.

We've also gone on and treated patients with the adenoviral vector system, [AVE], on the top, that stands for adenovirus RTS systems.

Which, of course, in IL-12, is the cytokine IL-12.

We've -- in our glioma study, we notice -- demonstrate that we can control the expression of IL-12 with V, V for veledimex.

Again, we've had success in humans.

At the NCI, they published an important work in just the last few weeks, demonstrating the biology of IL-15.

This is something that we predicted at ZIOPHARM.

But in the NCI study, they used lymphodepleting chemotherapy, again, to free up IL-15 in the patient.

And they were able to show that IL-15 levels were a biomarker for success.

They heralded success.

In other words, elevated IL-15 levels, as a result of lymphodepletion, resulted in complete responses to patients who had CD19 directly CAR-modified T-cells.

So that again shows that IL-15 is a driver for complete response.

All of these now add up, if you would, to the third-generation technology, which we are launching.

This third-generation technology centers again around the point of care.

Slide 10 looks at some of the data that underlie our technologies.

Again, we're focusing on CAR-modified T-cells here directed towards CD19.

This is an excellent space to be working in, because we know essentially the boundaries around CD19-directed therapy.

So the first generation technology completed, published, clearly showed that we can have responses in patients.

Indeed, we have already doubled the survival rates in these patients and clearly showed that the T-cells persisted in patients after they're being infused.

Then we've gone on, on the right-hand side, to shorten the manufacturing.

This actually is where the trial currently stands and patients are benefiting from this approach as we speak.

Here, on the left-hand side of this PET scan is a patient unfortunately has refractory ALL.

This is a patient who persists -- whose disease persisted despite all available therapy.

Then they got lymphodepleting chemotherapy and they got the Sleeping Beauty modified T-cells.

And as you can see on the PET scan on the right-hand side, by day 48, they had a complete response.

So again, this is like other people's data in that it shows a complete response.

It shows a dramatic antitumor response.

But unlike other people's data, this is done with a nonviral approach to gene transfer.

And for us, this is not the resting ground.

This is essentially the proof positive, so that we have the line of sight to get to the next stage, which is on Slide 11, which is where we further reduce the time and culture to under 2 days.

This again is our point of care technology.

So on the left-hand side, I've schematized this for you, so you can see that the patient, for instance, would come in and have a leukapheresis.

Those products would be genetically modified using the nonviral system of Sleeping Beauty to express the CAR and the membrane-bound IL-15 here.

The membrane-bound IL-15 is under the control of the switch, the RheoSwitch system.

And then those T-cells are rapidly infused into the patient.

There's no need to propagate the cells in large facilities now.

After they've been infused, we can control their expansion by activating the switch, activating the switch using veledimex.

And this will allow us, again, to customize the amount of T-cells needed for that particular patient.

So in the middle, we've modeled this.

We've modeled this in these mice.

You can see little images of mice now in these boxes.

These are 6 of them -- there's 5 of them in these groupings.

For instance, in the tumor mice, tumor-only section, these are mice that received a leukemia, a human leukemia.

And the human leukemia has been genetically modified to emit light.

And you're actually, on your slide, seeing light, except it's been false colored, like a weather map, if you would.

In other words, red is the most light coming out of the animal.

So as can see by inspection, these mice just receiving tumor, of course die from rapidly progressing tumor.

When you put in the CAR, you do have an effect, but it doesn't clear the tumor.

But when you put in a CAR made by this point of care technology, in other words, the simple DNA introduction followed by the immediate infusion, you can sweep the mice clear of tumor.

On the far right-hand side are our technology where we have now taken the switch, put it into the T-cells and allowed the T-cells now to be under the control of the RheoSwitch.

And we can use veledimex to turn on and turn off and turn back on again, IL-15.

And this will be the technology that when these T-cells go into the human, we can essentially control IL-15 levels using the clinically available molecule, veledimex.

So this puts our priorities in place on Slide 12.

So as we go through the year, we're focused wholly on decreasing the cost and the time of manufacturing.

We're avoiding the complexities of generating T-cells using virus.

We're using the clinically established switch technology to express membrane-bound IL-15.

And then we're going to be controlling T-cells after their infusion to mitigate any off-target effects.

And we're going to be testing the hypothesis that we can get rid of chemotherapy.

We can simply electroporate in the plasmids, infuse the T-cells and not have to lymphodeplete that patient.

On the right-hand side, you can see how powerful that is, because we can use the point-of-care, to target through CARs, we can target through TCRs, for instance, for our solid tumor program, and we can put all of this under the umbrella of the RheoSwitch, to control the expression of membrane-bound IL-15.

On Slide 13, we let you know that one our partners has also embraced our technology, the Sleeping Beauty nonviral system, as well as the RTS switch system.

Merck KGaA from Darmstadt are going to be using the Sleeping Beauty system for their CAR program.

They're going to be co-expressing the RTS with RTS, the membrane-bound IL-15.

And this they're going to be using, at least in this initial comment, for their two CAR targets.

And we anticipate all of this essentially coming into the clinic in the next year, 2018.

Another partner on Slide 14 is our work at the NCI, with Dr. Steven Rosenberg.

Here, Dr. Rosenberg is working with ZIOPHARM to be able to use the Sleeping Beauty system to personalize immunotherapy.

The great advantage, or one of the great advantages of using DNA versus virus, is that we can readily make that DNA at a fraction of the cost that we use -- that it would take to make a virus, to also genetically modify T-cells.

Therefore, we can begin to think about personalizing immunotherapy.

And that is the key.

You have to essentially personalize immunotherapy because the T-cell receptors that are targeting solid tumor, targeting neoantigens that are expressed within solid tumor, these are unique to each patient's tumor.

They're the Achilles' heel of those cancers.

So once one can target them, you can go after the vulnerability of the cancer itself, but you have to make one product for each patient.

And you can only do that with a nonviral approach to gene transfer.

Because again, the simplicity of the biology and the cost savings of avoiding a virus open up this window.

And we have that window open to us.

So we're working with the NCI, as you can see, 2 papers there in June and January from last year, essentially provide the backbone of what we're doing.

And then the CRADA that we announced at the beginning of the year with our partner, Intrexon.

In addition to the work at the NCI, we're also building our own program with respect to targeting neoantigens using the Sleeping Beauty modified T-cells, and we'll have more to say about that in the weeks and months to come.

So that cell therapy program in the first 14 slides, really emphasizes the cutting edge science that we've now brought to the bedside, to be able to deliver on point-of-care therapy.

Again, addressing the major issues of cost and control.

These next few slides now pivot to our adenoviral program.

So on Slide 15, I'm going to essentially remind the audience that we're advancing to Phase III studies with this important asset.

And we've been able to do so basically since May of 2015, to where we are today.

In 2 short years, we've taken this program from Phase I the cusp of a pivotal trial.

On Slide 16, I want to remind folks about IL-12, interleukin 12.

This is a master regulator of the immune system.

IL-12 promotes immune responses by activating NK cells and T-cells.

And it does so with a receptor.

You can see I've cartooned this out, as IL-12 as a little circle, a yellow circle.

It binds an IL-12 receptor that then kicks off activation pathways within T-cells and NK cells.

These activation pathways have a number of ripples essentially through the biology of NK cells and T-cells.

For instance, they make NK cells and T-cells sticky.

They have upregulated adhesion molecules, that's very important for once the T-cells and the NK cells are within the tumor microenvironment, because they can stay put.

For instance, IL-12 also drives the differentiation of T-cells, again, making it angry, making it a killer, just like NK cells so they can fight tumors.

And on the right-hand side, you can see the flooding in now of these immune cells, these T-cells and NK cells into the tumor microenvironment to do tumor killing.

So biologists have known for a long time the power of IL-12, that it could generate cytokines out of T-cells and NK cells, proliferate T-cells and NK cells.

It could stop regulatory T-cells from getting in the way of these killer cells.

This biology was known.

But what was not known was how to control IL-12.

It was not known until now, because ZIOPHARM is the company that's been able to tame, if you would, this master regulator of the immune response.

So how do we do that?

So on Slide 17, we set up a trial across North America, enrolling some of the sickest patients in the United States.

These are patients who have not just brain tumor, not just glioblastoma, but have recurrent brain tumor, recurrent glioblastoma.

And we've been able to essentially work with some of the best in the United States, across the United States.

You can see the hospitals, the medical centers on the left-hand side.

When patients are enrolled in our study, they've had the desperate news that their brain tumor's come back.

And for some of those patients, they can go on and have another resection.

This resection is not curative.

This resection is palliative.

It's basically there to control some of the pacing of the disease, to relieve some symptoms.

But it allows us a window where we're able to give the neurosurgeon a syringe.

And in that syringe, they inject just 100 microliters of fluid, basically the tip of your pencil, and that is placed into the tumor.

And there is tumor still there, despite resection.

The patients then takes 14 days of veledimex, the activator ligand that drives the RheoSwitch system.

And then -- we then, or the patient, all importantly, takes advantage of the IL-12 biology.

All of what I showed you on this prior slide, this ability for the T-cells and the NK cells to get activated to kill, happens then in these patients as a result of IL-12 being made in their tumor, under the control of the RheoSwitch system.

So to understand this biology, we started a Phase I trial, in which patients were assigned to 3 cohorts.

And in these cohorts, they got 20 milligrams, 40 milligrams and then sort of a dose-finding study of 30 milligrams of veledimex.

In other words, high, medium and low levels of veledimex.

And this veledimex essentially, we were asking the question, could it activate IL-12 biology in the human?

And could it do so in patients with brain tumor?

So on Slide 18, the answer is yes.

So these are the data that definitively show that the switch works, the RheoSwitch system works.

So to help you understand these data, I've set up a little rheostat, if you would, on the left-hand side.

It goes from off to on.

And actually then has a gradation in between because that's exactly how it works.

It's not a light switch.

It's a rheostat, it's a RheoSwitch.

So we have green 20, blue 30, 40 orange colored dosing of veledimex.

So the patients take the drug, veledimex by mouth.

And then it crosses, as you can see in the lower left-hand side, into the plasma.

And the amount of veledimex, the amount of activator ligand, if you would, that we are measuring is proportional to the amount of drug the patient's taking by mouth.

In other words, it crosses from the gut into the bloodstream.

No major surprise there, but very satisfying that there is a step function, in other words, low, medium, high, that it actually mirrors the low, medium, high dosing of the veledimex.

What was important, and still is important, is that we could measure veledimex in the brain tumor.

In other words, the veledimex crosses from the blood, across the blood brain barrier, and again does it with proportionality.

Patients take the lowest amount of veledimex, 20 milligrams, to the highest amount of veledimex, 40 milligrams.

We can again find that proportionality, that step function from low, medium and high amounts of veledimex in the tumor.

So these data are necessary, but not sufficient.

On the right-hand side, is what happens then when the veledimex interacts with the RheoSwitch.

The RheoSwitch has been deposited in the tumor by the injection of the adenovirus at the time of neurosurgery.

So it's sitting there, it's waiting ready.

It's waiting, essentially to be programmed, to be activated by the veledimex.

The patient takes 20 milligrams of veledimex.

Another cohort, 30 milligrams, another cohort, 40 milligrams, and let's look and see what happens now to the IL-12 levels.

Now, as you can understand, we can't measure IL-12 levels serially by measuring IL-12 in a brain tumor.

That would be too invasive for these patients.

But fortunately, for us, we're making so much IL-12 that's coming essentially out of the brain tumor environment, that we're able to put a needle in the arm of these patients and draw blood from the patients and measure IL-12 that is percolating back out of the brain.

And we can sense it, we can measure it in the peripheral blood.

So at the beginning, as you can see on the upper right-hand side, there's no IL-12 circulating in these patients.

Once they begin to take veledimex, you can see in the green, blue, and the orange, you again get low, medium and high levels, a step function of IL-12 that drives essentially the biology, the antitumor response.

So again, you're seeing now, it goes from off to on, and the on is proportional, it's a rheostat -- it's a RheoSwitch.

Once the patient stops taking the veledimex, so the IL-12 levels stop, and they return to baseline.

So this is recombinant IL-12.

This is, if you would, made from us, ZIOPHARM, in the adenovirus.

What happens when the body senses this IL-12?

Is it active?

Absolutely, it is active, because it then kicks off the body's own generation of another cytokine, called gamma interferon.

So at baseline, there's very little to none expression of gamma interferon.

Then the patient take veledimex, low, medium, high levels of veledimex, and it kicks up IL-12, which again, kicks off the proportionality of the gamma interferon.

The patient stops veledimex and the levels of gamma interferon return to baseline.

Again, this is proof positive that the switch works, as not only being able to turn things on and off, but as a transcriptional regulator to dial in greater doses of this all-important drug, IL-12.

So on Slide 19, we have gone on, on this Phase I trial, to follow these patients who are in our study cohorts.

And we've identified some very exciting biology with patients who received the adenovirus to control the IL-12, who received 20 milligrams of veledimex.

That's in the green at the top.

And when we watch these patients, we can see that their median overall survival is 12.7 months.

Now, I would remind that -- the audience that these patients have had multiple recurrences.

And this is, we think, very encouraging data for these patients.

And we think also encouraging data as we talk to the regulators.

But let's just put this in comparison now to what is available, for instance, to a patient.

If you, God forbid, were to have a recurrence of your GBM and you walked into your doctor's office, he or she would go through these data right here in the blue lines, and they would say to you, I'm sorry your tumor came back, but this is the best that science has to offer.

And I would caution also that in these studies, and I show these studies because we think they are representative of the best studies in literature, in other words, they're randomized, or they're multicenter.

These studies often have patients, for instance, who only have one recurrence.

Let's look at just 1 study, for instance.

The randomized multi-institution Phase II study comparing polymer versus Carmustine.

Carmustine is a chemotherapy agent.

So in this study, patients, just like our patients, went in and had another resection because their tumor recurred.

And then they were randomized to either get a wafer impregnated with Carmustine, a Gliadel wafer, if you would, or a wafer that was inert.

In other words, it just had the polymer, the backing, and then the patients were followed.

So you can see here that really unfortunately for the study, really not much happened when you added the Gliadel, you added the Carmustine.

You can see for those 110 patients they lived about, on average, about 7 months.

But also, similarly, did the patients live, who had that repeat surgery.

So in other words, these are some of the data that if you would, control for that surgery.

Again, our biology, our understanding of our median overall survival look very good when you can stack it up against what's really the best available therapy for humans.

So as we have an eye now towards proceeding with our pivotal trial, we started to look forward to what the commercial landscape might look like.

What is the totality of experience around recurrent glioma?

So this is a major unmet need.

There's 74,000 or so new cases annually worldwide.

In Europe, there's estimated about 13,000 patients each year with recurrent glioblastoma.

In the U.S., about 11,000 each year with a recurrent glioblastoma.

And as you can see, because the recurrent rates are so high, this really represents, essentially the initial diagnosis.

90% of patients unfortunately with initial diagnosis of glioblastoma recur, so this is a major unmet need.

On Slide 21 is a reminder of our regulatory stance.

We're currently in collaboration with investigators and regulators assessing the protocol design option for our pivotal trial.

And I would emphasize here, this includes the potential for a single arm study, comparing the adenovirus delivery of IL-12 and veledimex to historical controls in a subpopulation of patients with recurrent GBM.

And I know many of you want to hear about details of this trial, and we will give you details.

But at the moment, we're going to compete our discussions with our advisers and our regulators before we reveal further information.

I'm summarizing the clinical data here.

Currently, the median overall survival stands at 12.7 months for the patients with -- receiving 20 milligrams of veledimex, and we're going to have an update for you at ASCO in June, basically next month.

And then we also have an eye towards commercialization.

As we're undertaking the plan for this pivotal trial, we're also actively evaluating partnership opportunities with the goal for commercializing this adenovirus and veledimex asset.

I'd like to now move the conversation in the last few slides I have with you, really to touch on some important other aspects of our program.

Again, I think we've been very thoughtful about how we're rolling out new therapies that are really white space, untapped opportunities in the oncology arena.

So on Slide 23 gives you an update for 2 of these.

On the left, they're both addressing acute myeloid leukemia.

So acute myeloid leukemia, for the most part, doesn't express CD19, so it can't be targeted with CD19-directed therapies.

So on the left-hand side, is a new CAR-T program that we're launching, where we're targeting a molecule called CD33.

CD33 is important because it's on many acute myelogenous leukemia cells, and we're using a CAR to do this.

Now because this is essentially an unproven target, we're putting this on the backbone initially of our lentiviral program.

And then as the data come in, reassuring us about the target and as we move forward, which may even be its own commercial space, we're also adapting our technology to target CD33 with the point-of-care technology, which I introduced with you earlier on.

On the right-hand side is our NK, or natural killer cell program.

We've essentially figured out how to grow large numbers of primary NK cells.

These are not immortalized or tumor NK cells.

These are primary killer NK cells, and we've figured out how to identify universal donors, and then to grow up very large numbers of those NK cells using a specialized feeder cell that expresses a molecule called IL-21 or interleukin 21.

This is an important event because now we can make large bio banks of these NK cells and we can make them in advance of the patient coming to the clinic.

In other words, we can make them today, put them in the freezer.

When the patient comes into the clinic, we can infuse them on demand, rather than when the NK cells are available.

These NK cells have important biology because they lack the T-cell receptor.

So in other words, we don't have to edit or genetically engineer away or cut out the T-cell receptor.

So NK cells have a lot of good biology and they're a good cellular template to be used essentially for off-the-shelf therapy -- therapeutics, and we'll look at that together.

And indeed, we're advancing steadily towards critical trial, and this really addresses our issue of cost.

So you can again see some of the tenets here of control on the left-hand side, where we're targeting CD33, but we also have a switch there in which we can blow up the T-cells if we need to.

It's a kill switch or an off switch.

And then the issues of cost on the right-hand side, where we're essentially making cells, using an inexpensive and appealing technology where they're made in advance of one's need.

Slide 24, I want to turn to a summary of our financials and also looking ahead.

So we have cash and equivalents of $66.4 million as expressed at the present time.

This has a cash runway through 4Q 2017.

And this actually will allow us, as you can see on Slide 25, to initiate the pivotal trial.

We're in excellent shape.

As I've shared with you now, since talking, that we have terrific data and we have terrific assets, and this opens up many opportunities to address our financial reserves.

I'd also add, just in passing, that we have money in MD Anderson, which we use for advancing our clinical programs on their campus.

On Slide 26, really now summarizing our competitive advantages.

We have this point-of-care technology, this very rapid manufacturer that we're applying for CAR and TCR.

This is based on the clinically validated Sleeping Beauty platform.

This allows us to decrease costs, and with the RTS system, increase the control of the genetically modified T-cells.

The RTS now, we've demonstrated proof positive that we can control cytokines in the clinic.

The adenovirus program with IL-12 and veledimex is proceeding to a pivotal trial.

We're harnessing RTS and T-cells, so essentially we can customize IL-15 expression in the membrane-bound form using veledimex.

The solid program now is gathering momentum as we target neoantigens with personalized therapy, using the Sleeping Beauty platform.

And again, the off-the-shelf program is built on our NK cell approach.

This is done in partner with Intrexon, who are just doing terrific, as well as clinical sites across the United States, and I mentioned the NCI early on.

Our milestones, on Slide 27.

For the RheoSwitch program, delivering inter tumor IL-12, in other words, the adenoviral program, we're going to have updated data for you in June at ASCO.

We're going to initiate the pivotal clinical trial for recurrent GBM.

I haven't had enough time with you today, but I will just again emphasize that we're going to launch 2 other Phase I trials.

The first is a combination trial, where we're combining checkpoint blockade, anti-PD-1 with the adenovirus controlling IL-12.

This will be a very interesting study to do.

And then we're also initiating a Phase I study, again, delivering adenovirus for the controlled generation of IL-12 for children with brain tumors, again, a major opportunity for the program.

The CAR-T program, we're continuing our Phase I clinical trial, where we're shortening the manufacturing time.

I again shared with you the antitumor response that patient had.

And we're advancing our third generation technology, where we're combining the controlled generation of IL-12, membrane-bound IL-12, towards this point-of-care approach.

We're initiating a study with -- for AML with our CAR-T, with our CD33 directed therapy.

And we're advancing the program for personalized gene therapy against neoantigens, which is our solid tumor program.

Building on that solid tumor program is our work at the CRADA.

We couldn't be more excited about this, with Steve Rosenberg and his team.

And we're also, as I alluded to, advancing our own technology to deliver personalized gene-modified T-cells targeting neoantigens and solid tumors.

Also in 2017, we're going to kick off the off-the-shelf NK cell program, especially useful for patients with elderly AML.

These patients, unfortunately, are not eligible for standard chemotherapy, so this represents a real hope for these patients.

And our GvHD program, we're advancing steadily forward.

I'll have more to say as these near clinical translation.

Slide 28 is our last slide in our pipeline that puts it all together.

Rather than going through this, I've said these in words, so I'll leave this with you on the page.

And I'll now end the conversation, and we'll now pick it up again with Q&A.

Thank you.

(Operator Instructions) And our first question comes from Keith Markey from Griffin Securities.

I was just wondering if there would be a simple way of describing the difference between what you call a point-of-care therapy and a cell that has been modified to express membrane-bound IL-15 and neither a CAR or a TCR receptor?

Sure, Keith.

Thank you so much.

So the point-of-care technology builds on the IL-15 data.

So in other words, point-of-care harnesses the IL-15 biology.

Because what IL-15 does is it provides a growth signal for T-cells, so that when you have IL-15 present, in other words, when it's bound to the membrane, those T-cells have a growth advantage or a proliferator advantage over their neighbors that don't express IL-15.

So this allows, one, under the point-of-care platform to take those T-cells that express IL-15 and, say for instance, CAR or TCR, and put them immediately into the patient and grow the T-cell through IL-15 biology in the patient.

And that's a major advance compared to, for instance, growing the T-cells in bioreactors, and then putting them into patients.

So would it be reasonable to consider the program that you're going to be initiating in the clinic next year with Merck KGaA as a point-of-care therapy?

Sure, that's such a great question.

So we haven't actually revealed that level of detail, but I would remind you and the audience that they are really behind our technology with respect to the Sleeping Beauty system and the membrane-bound IL-15, the control of the membrane-bound IL-15 under the RTS.

And our next question comes from Ren Benjamin from Raymond James.

Maybe just to start off, can you give us a little bit more color on the interactions that you had with the FDA, which was just recently announced?

And, I guess, what would you need to decide between a historical single arm study versus a randomized study?

And can you bracket maybe how large either of those 2 studies might be?

Sure.

So those are great questions.

So our meetings with the regulators in America, with the FDA have now gone on and we've had meetings in Europe with the major regulators over there.

As we essentially look at the totality of feedback that the regulators are getting us, we'll have more to say about the protocol design.

And so we have to hold it there basically as we go through essentially that dialogue.

Okay.

And then just regarding the cash position and the exploration of partnership opportunities, have you started talking with partners?

What's the ideal partner sort of look like?

Is it one that you might focus on the ex U.S. versus maybe worldwide?

How should we be thinking about that?

Yes, so we're open to all of the above.

I think we've had feedback that all of the above are enticing.

Folks are now seeing the survival data and are recognizing, especially in the background of the desperate need of these patients, so this is a -- this could be a major advance.

So we are in active discussions, and we'll have more to say as this solidifies.

Okay.

And then just, I guess, one final one.

What kind of transduction efficiency -- when we did the compare and contrast on the slides, clearly, you talk about how much better the plasmid system is over the viral.

But what kind of transduction efficiency do you see?

Because that would seem to be of importance, right?

And then also, what is the half-life of the membrane-bound IL-15 on the cell?

And how long does that stay even after you've "shut off" the switch?

Yes, sure.

So in terms of the last part of the question first, the regulation and the up and down, on and off, the membrane-bound IL-15.

We haven't gone into those details yet.

We'll have more to say, as that biology starts to transition to the clinic.

So we'll -- stay tuned, if you would.

If -- the transduction efficiency, also I think is an important point, so I thank you for it.

So the nonviral system is able to stably introduce a gene, whether it be the RTS cassette expressing IL-15, or whether it be a CAR or the TCR.

And once that cassette is hardwired into T-cells, it doesn't matter whether that cassette came from a virus or it came from a nonviral DNA plasmid.

The T-cell that has to do the bidding, if you would, of the cassette.

So the nonviral approach, the great advantage of the nonviral approach is, that it is able to insert these genes, in particular, able to insert the RTS system.

So even if we have small starting numbers, and I think we showed this at ASH, even if we have small starting numbers, these T-cells then proliferate in the patient.

And I think this is the real key now, because you're seeing us and you're seeing others recognize that you don't have to give large numbers of T-cells.

And we really want to challenge that further and say, what is essentially the fewest numbers of T-cells we can give?

So we can use veledimex to drive the expansion in the patient.

And our next question comes from Tony Butler from Guggenheim Securities.

Two questions, really.

One is, with the amount of capital currently available and the notion of moving forward in the pivotal trial for GBM, can you give us a flavor for how sites might think about the notion that will you actually be able to complete the trials with the current capital?

That is would they want to engage despite the fact that there may be some financial risk that they would have to engender?

That's question one.

I want to actually ask question 2, if I may, based upon the last question, which I think you answered very adroitly.

If you have RTG and it's, let's say, the efficiency is not great, but yet, those cells can proliferate.

Aren't you going to have variability by patient?

Because what you really do need is maybe some sort of critical mass of cells having RTS in them, something around 10^8.

How can you ensure those patients have that, if you will, that number of cells or enough replication has occurred?

And if I may one other, Laurence, I'm sorry, but it's really around Merck KGaA.

Clearly, a good partnership.

I might have thought or I wondered if, in fact, some of the discussions you've had with them already did include the adenovirus IL-12 veledimex program.

And I'm curious if you'd like to speak about that.

Okay.

So thank you for that.

So in terms of the cash and the starting of the pivotal trial.

So we have had no problem identifying patients for sites.

Indeed, we have a waiting list for our program.

As for instance, as we transition to a Phase III company, it's hard for us to manage still the Phase I trial because we have so much interest in that.

So that really has not been a concern.

Your second question around the efficiency of gene transfers, really, is really good, but it makes an assumption.

It makes an assumption that the efficiency of Sleeping Beauty is limiting and it's not.

Because the simple fact is, is you can take a leukapheresis product and electroporate in the -- for instance, if you wanted to.

You don't have to, but if you wanted to, you can just take the entire leukapheresis product and electroporate it.

And then you'd have plenty of cells.

But the great beauty, if you would, of Sleeping Beauty is you don't have to do this.

By the engineering of the switch controlling IL-15 with the CAR, you can start from relatively small numbers.

It's not a big stress, if you would, on the manufacturing facility to do this.

And then the last question, just remind me again, I'm sorry, I spaced on out.

Oh, the Merck question, so I'm getting a prompt from Francois.

Thank you.

So the question around Merck and their interest in adenovirus and IL-12.

I would just say, that's just privileged conversations between us, and I don't want to really go further at this point.

(Operator Instructions) And our next question comes from Whitney Ijem from JPMorgan.

A lot of my questions have been asked, so I'm going to ask a very forward-looking one.

But as we look toward the point-of-care program, how do you guys think about it, or would could that look like from a GMP, kind of regulatory perspective and commercial perspective?

What does that look like?

Sure, thanks Whitney.

So from -- obviously from a commercial side, you can see the major advantages.

The simplicity of being able to generate the T-cells and immediately infuse them into the patient.

That technology we're managing very well in terms of our regulatory approach.

And you've seen me do this now, by having these generations, if you would, of T-cells.

The first generation was to firmly establish the Sleeping Beauty system worked.

Until I conceptualized, this has never been done in humans before, and now it has.

The second part of the system is the second generation, which is, how does one shorten the manufacturing time.

And woven into that, Whitney, is a lot of the regulatory ideas I have, that will then smooth the transition from that second generation to the third generation.

So in other words, we're working with the regulators now on the path forward.

And we're not delivering point-of-care to them and saying, here, look, swallow this whole idea.

We're parsing this slowly with them, to make sure the patients are safe, to make sure the technologies are feasible and then with the expectation this could -- will be essentially accepted.

The other side of your question is, as we kind of think forward, in terms of how this disrupts the field.

I think, is also equally, we're managing carefully.

We are given over to the idea -- and this is why we haven't built out large GMP facilities.

We've given over to the idea that you just simply don't need them, and that the costs that are encumbered by having large programs associate with GMP facilities that do viral transductions and large bioreactor facilities is just not scalable.

And it's just -- simply speaking, it's just not going to be affordable.

So we have to do better, and I think this is a legitimate way forward about how we can improve on that science.

And our next question comes from Jim Birchenough from Wells Fargo.

This is Nick in for Jim this afternoon.

Laurence, just firstly, obviously, I know you don't want to go into any detail about the potential pivotal trial designs for adenovirus.

But can you comment on where you are in terms of manufacturing?

And do you have a commercial supply?

Is -- when you start the pivotal trial, we'll be using commercial material?

And I have a follow-up.

Sure, that's a great question, Nick.

So at the moment, this is completely on our radar screen, and we -- and in our wheelhouse, but we're not disclosing what the exact tactics are right now.

Okay.

And then, my follow-up is going back to the point-of-care.

And obviously, one of the goals of CD19 CAR-T manufacturing campaign is it's self-sterilizing.

And so when you get to this point of discussing what is the potential for transducing a circulating tumor cell that happened to get caught in the aphaeresis, or even a leukemic blast, as happened at U Penn, how do you get over that barrier in such a quick turnaround?

Sure.

So a couple of things.

One is that the -- [when] patients have tumor, in other words, say for instance, I had a CD19 positive malignancy, the return of that tumor cell to them is no worse than where the patient started, right?

So in other words, I haven't changed the bulk in that tumor as a result of aphaereising them.

The second part about it is, that we also have developed kill switches.

So if there is a problem associated with the return of a leukemia that may be a little bit more aggressive or so forth and so on, we'll be able to handle that with our kill switch biology.

I'm showing no further questions.

At this moment, I'd like to turn the call back to Dr. Laurence Cooper for any further remarks.

Thank you very much, operator, and thank you very much, listeners.

I'll wish you a good day.

Ladies and gentlemen, thank you for participating in today's conference.

This concludes today's program.

You may all disconnect.

Everyone, have a great day.