Alaunos Therapeutics Inc (TCRT) 2018 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the November 12 conference call.

(Operator Instructions) As a reminder, this conference call may be recorded.

I would now like to turn the conference over to David Connolly, Vice President of Corporate Communications and Investor Relations at Ziopharm Oncology.

You may begin.

Thank you.

On November 9, we filed our 10-Q for the third quarter of 2018, and this morning, we announced a private placement and a new collaboration with Regeneron.

The Form Q (sic) [Form 10-Q] and both of these press releases are available on our website.

During this morning's call, representatives of the company will make a number of statements that are forward looking, including statements regarding the potential of the therapeutic candidates in our development pipeline.

Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described in our SEC filings.

On today's call are Dr. Laurence Cooper, CEO and director of Ziopharm Oncology; and Dr. David Mauney, Executive Vice President, Chief Business Officer, Interim Chief Offering Officer.

And we'll take questions at the end of the call.

Dr. Cooper?

Thank you all for joining us today.

We're about 1 month into the new Ziopharm, and during this short time, we've already secured financing, formed a new collaboration with Regeneron and have an ongoing dialogue surrounding a business development initiative which is now in advanced stages.

We last spoke with investors on October 9 on the heels of the announcement that, as of October 5, 2018, we dissolved the original collaboration known as the Exclusive Channel Collaboration or ECC with Intrexon and replaced it with a new licensing agreement.

As of early October, Ziopharm is a different company, and with the support of our new board, we can now move forward unencumbered operationally and clinically.

The financing is expected to close on November 13.

As it closes, we have much to look forward to with capital from some of our largest, most supportive and deep-pocketed investors to execute our clinical development and corporate development plans.

Our patients and investors will be rewarded as we're solving today's big issues facing immuno-oncology, namely we're attacking cancer with the patient's own immune system using cost-effective, safe and scalable technologies; and increasingly aligning these treatments for solid tumors.

We believe we have 2 best-in-class therapeutic platforms with the controlled IL-12 gene therapy based on our tunable switch and nonviral Sleeping Beauty gene transfer to produce TCR-T and CAR-T therapies.

As we promised, 2018 is a transformational year for Ziopharm.

A lot has transpired in the few weeks since we last held our conference call, and we will focus on those updates.

With that, I'll turn the call over to David for additional details.

Yes.

Thank you, Laurence, and thanks, everybody, for being on the call today.

We're obviously very excited.

Looking backwards.

I joined Ziopharm just over a year ago.

I consider this a tremendous opportunity for me personally.

And as a scientific platform was then and is today rock solid, it's frankly getting better every day.

To capitalize on this opportunity, though, we had to become an independent company.

Prior to our announcements last month, we were faced with many issues.

We had a number of encumbrances that held us back as a result of the original ECC agreement with Intrexon.

For example, we were inefficient in our drug development activities in large part due to joint governance and shared decision-making and development responsibilities.

The intellectual property provisions in the contract restricted the production, protection and continued use of IP developed by Ziopharm.

The ECC sublicensing provisions and the potential for de facto veto rights chilled the interest and the ability for Ziopharm to attract and execute sublicensing arrangements.

And our balance sheet and financing viability was severely limited by the preferred stock being issued to Intrexon.

Finally, there were times, at times, misalignment between the companies that absolutely needed to be resolved.

We knew we had to create a new way of doing business, and we knew the preferred stock had to go away, but we did not stop there.

In fact, we succeeded across the board and then some and we did so on great terms.

Ziopharm management and our board initiated and drove a vigorous process throughout the entire course of 2018.

It took us the better part of this year because we were unrelenting in our beliefs and our desires, and we did not stop until we got the deal that we wanted and deserved.

If it is not clear how monumental this last month has been, let me once again summarize what has happened in very simple terms.

One, the ECC is gone, now replaced with a traditional biotech license agreement, giving us full developmental authority over preclinical and clinical activities, including manufacturing, regulatory and sublicensing freedom for each of our core platforms.

We now have the ability to generate our own IP, and I will tell you we are rapidly proceeding on this.

With respect to CAR-T, we do not wish to discover and develop new, unvalidated CAR targets.

Instead, we are free and clear globally for our so-called point-of-care work with CD19 without restriction, and we secured rights for an additional CAR target that remains unnamed and still subject to Merck KGaA's option.

This target happens to be one of the fast followers to CD19 and is already validated.

Should we pursue this second CAR target, we'll update the market accordingly.

I can tell you, for both of these CAR targets, we are in advanced stages of discussion with an outside party, with the potential to collaborate and accelerate clinical work in the CAR space.

Financially, the preferred stock issued to Intrexon was a significant hindrance to our balance sheet.

Let me remind you, as of September 30, 2018, it had already accumulated $37 million of interest in just over 2 years and was valued in total at $157 million.

This was set to continue to compound at 12% annually, as you know.

Over the past 12 months, investors frequently reiterated that the preferred stock was a hindrance to their making an investment in our company.

Allow me to illustrate this issue with some simple math.

If we had not eliminated the preferred stock and instead had seen the preferred theoretically converted on September 30 of this year, it would have converted to nearly 52.5 million shares of common stock.

Or another scenario, had we not eliminated this agreement in its entirety and instead accumulated the 12% annually on a go-forward basis, in 3 years, it would have grown to well over $200 million, and in 5 years, it would have approached $275 million.

This situation was increasingly untenable and we had to stop it.

It is now gone.

We did not buy it out or negotiated down.

As part of the new agreement, it was zeroed out, eliminated as if it never existed at all, so not only did we reverse our balance sheet by $157 million in a single day last month and get the programs we wanted.

We have also secured our balance sheet as of today, just over a month later.

The financing that was announced today is vitally important to the company as we now have cash runway into the second quarter of 2020 both with our corporate cash as well as our resources available to us at MD Anderson Cancer Center.

And we cannot be prouder to have this syndicate of investors that are supporting us.

We did not go to the open market.

We instead systematically targeted some of our largest and most supportive shareholders who know the company best.

In fact, several investors reached out to us immediately after the Intrexon separation was announced and diligence commenced immediately.

The syndicate includes MSD Partners, Miller Value Partners, White Rock Capital Management, Level One Partners and individuals affiliated with strong investment firms such as Watermill asset management.

The investor group supports our long-term vision for the new Ziopharm.

When determining the size of the raise, we ultimately decided, after considering dilution, to limit the offering to $50 million, which will allow us to build out the company well into 2020 past several important milestones.

Now let me put up the one and only slide for today, one we think is indeed quite powerful.

A month ago, we had around $30 million in cash and cash equivalents, but after the financing closes tomorrow, we will have $75 million.

A month ago, we had a preferred stock issued to our partner valued at $157 million and accumulating, and now we have 0. A month ago, we had a $6 million quarterly preferred stock dividend to -- due to our partner.

Now we have 0. It's simple math.

We reversed our balance sheet by a staggering $207 million in just over a month by getting rid of $157 million in convertible debt and subsequently adding $50 million of cash from some of our largest and most deep-pocketed and supportive investors, all while getting the programs we wanted, ones that we think have the opportunity to bring incredible value to shareholders going forward.

After the financing closes tomorrow, we will have a cash runway to execute and surpass multiple milestones, which now allows us to pursue partnerships and business development deals from a position of strength, as we always said we would.

Our cash resources are now fully sufficient to execute planned development activities for Sleeping Beauty TCR-T and CAR-T therapies as well controlled IL-12 into the second quarter of 2020.

And we have maintained full control over the approximately $29.6 million at MD Anderson Cancer Center, which also happens to run into mid-2020.

We didn't stop with contracts and cash, however.

As we were negotiating for our independence, we were also able to reconfigure our board by adding life sciences depth and expertise with 3 new directors who collectively have decades of experience funding, running and leading biopharmaceutical companies.

Our new Lead Director is also a formidable president who has direct relevant experience as a longtime biopharma CEO himself.

And in a final but important move, the board just added our CEO, Laurence Cooper, as the newest voting member.

And we're not done, as the formal recruitment process continues to find the right talent and industry acumen to add to our board with the remaining vacant seat.

From now forward, management is free and totally unencumbered to spend its time developing our science and getting it into the clinic to generate human data, efforts we believe will accelerate tremendous market value and also efforts that will put a real squeeze on the nonbelievers.

We have the flexibility to recruit world-class talent and have already engaged a leading search firm to help us acquire best-in-class executives.

We are now deep in discussions with potential partners both in the U.S. and abroad, and we now have the financial strength to make the best strategic decisions going forward.

One of those decisions was to add a partner in Regeneron for our IL-12 program.

Regeneron is a $38 billion company that thinks and acts like an entrepreneurial start-up.

And we could not be more thrilled to have not only access to their very newly approved PD-1 inhibitor cemiplimab, but we are also thrilled to be working with their world-class scientists and expert drug developers.

We are also unrelenting in our negotiations with Intrexon to maintain our deep relationships with the 2 existing partners that we value the most.

Our relationships with the National Cancer Institute and MD Anderson are intact and stronger than ever, with 2019 setting up to be a pivotal year as we will be treating patients at both centers with groundbreaking, paradigm-shifting approaches to immunotherapy.

It was mission critical for us to retain every aspect of the relationship with both institutions, first, with the NCI and the ability to capitalize exclusively on all of the IP and know-how we have and will continue to develop as part of the Sleeping Beauty TCR-T program.

And at MD Anderson Cancer Center, we have accomplished much with point-of-care Sleeping Beauty for CD19.

The science behind the treatments being done there is phenomenal, and we now have that work exclusively.

Just as important, we have access to the almost $30 million there to push CD19 and potentially more over the goal line.

Finally, we used the last year of partnership discussions to guide us in our future development efforts and validate where the full potential lies across each of our assets.

With their direct input, we now have a bit of a cheat sheet and clearly know what we need to do to unlock that value, and we expect that knowledge to pay tremendous dividends as we move forward.

Now let's shift gears and talk about these assets.

Our platform technologies, Sleeping Beauty for TCRs and 2 highly validated CAR targets, as well our controlled IL-12 and our pipeline of trials, all remain intact after our separation from Intrexon.

We now have the autonomy and the focus to develop each of them in a way that brings the most value to our shareholders.

We believe our key asset in utilization of our groundbreaking technology revolves around the solid tumor opportunity, which begins with the NCI and the CRADA.

Solid tumors or epithelial cancers cause most cancer deaths worldwide.

Solid tumors dwarfs the size of markets currently addressed by the existing CAR-T therapies for liquid tumors or blood cancers.

In fact, the solid tumor market is over 8x larger than the liquid tumor market and thus represents tens of billions of new opportunity.

The Sleeping Beauty nonviral DNA plasmid-based system could be the key to targeting solid tumors of all types, including colon, ovarian, lung and others.

And the system is not only a first of its kind, but it also enables truly personalized therapies made from a patient's own T cells to target their very own cancer cells, something we and many experts see as difficult to commercialize and keep costs under control when considering existing viral-based approaches.

The work with the NCI on Sleeping Beauty has been underway for a very long time.

In fact, Dr. Rosenberg published his first paper on Sleeping Beauty in 2009.

And 9 years later, this work is now at a point where we're ready to go into the clinic and treat patients next year.

2 years ago, we entered into a CRADA, a collaborative research and development agreement, with the NCI to get this project up and running.

Before the CRADA, the world, thanks to Dr. Rosenberg's leadership, had experienced using T cells from the patients to treat their existing tumor after they were taken out of the body then selected and expanded, but the problem was how to get the TCRs into the T cells.

The preclinical models suggested it could be done.

Dr. Rosenberg and Ziopharm aligned to use Sleeping Beauty to do gene transfer because this gene transfer approach is totally different from other cell therapy approaches.

To treat patients with solid tumors will take a lot of different genes, either in one drug or multiple drugs, to personalize the therapy for each patient.

Our Sleeping Beauty platform can be rapidly produced and is scalable, and with the cassette-based system of genes transfer, the platform stands to be a first mover in delivering T cells expressing multiple TCRs to target solid tumors in individual patients.

This work builds on the work of Dr. Cooper's lab at MD Anderson Cancer Center where Sleeping Beauty was developed to be faster and cheaper, more so than any other gene transfer technology, and was the basis of the buyout by Ziopharm-Intrexon in early 2015.

Over the last 22 months since the signing of the CRADA, Dr. Rosenberg's team has been working through the bioengineering steps necessary to get our Sleeping Beauty system ready for the clinic.

There was a lot of preclinical work modeling, validating and then using Sleeping Beauty to generate TCRs with actual patient cells.

We know we can use Sleeping Beauty to get the TCRs transferred into the T cells, and this work is actually being done every day at the NCI.

The team at the NCI has reported back that Sleeping Beauty could be a terrific solution for the process to target solid tumors.

The Sleeping Beauty system can do many things that current approaches cannot.

Not only does it transfer the TCRs to the T cells quickly and cost efficiently, it has the capacity to put multiple pre-programmed TCRs onto the T cells and go after multiple cancer cells in the patient's solid tumor.

This is where the neoantigen sequences enter the equation, neoantigens which can now be identified by gene sequencing.

These are the mutations that cause healthy cells to mutate and become cancerous.

We are working with Dr. Rosenberg's team and discussing collaborations in parallel with other groups to turn these cells into targets for Sleeping Beauty modified T cells.

We simply could not be in a better position to benefit from the long history of success and know-how at the NCI.

We do not believe the NCI would move to an IND without being confident that this is a scalable and robust approach.

And by our best estimates, we will be delivering these therapies to patients for the very first time by the middle of next year.

We plan to own the TCR space targeting neoantigens.

We are jumping out as a first mover using nonviral gene transfer, and we are going to build a fully integrated TCR company to do it.

Our second Sleeping Beauty platform focus revolves around our approach for the very rapid, "less than 2 day" manufacturing of CAR-T.

With our independence, we are now able to execute on our own strategy, one that we think is most cash efficient while realizing the same tremendous value.

Proving success in delivering so-called point-of-care T cells will drive significant value and open up tremendous opportunities.

Rather than spending time and money to invent and validate new CAR targets, we have streamlined our efforts around 2 well-validated CAR targets and our entire effort is to get clinical data as fast as possible.

Of course, we are well on our way to process improvements at MD Anderson Cancer Center that will lead to 70% T cell viability, and we are identifying possible paths outside the U.S. to accelerate these efforts to get into the clinic.

We are in negotiations with a well-respected potential partner to drive forward our U.S. and ex U.S. activities and we hope to provide more details soon.

Our efforts are 100% focused on getting clinical data that proves to the industry that we change the game for them.

If we do that, it's game over, and we believe CAR players will need to access the Sleeping Beauty system immediately.

Lastly, with regards to our IL-12 platform, we negotiated the rights for this platform because we believe it works.

There appears to be huge untapped value with controlled IL-12 and the RheoSwitch, especially when you consider some of the comparable companies, whether they are developing brain cancer therapies or drugs designed to leverage the cytokines of the immune system.

In our hands, the RheoSwitch is the most clinically validated transcriptional switch in development, with more than 1,100 veledimex doses administered to patients to activate and regulate the switch and more than 100 patients in the clinic and across 3 types of solid tumors.

We have seen it tune IL-12 production to meet patient needs with precision and safety time and again.

IL-12 is the master regulator of the immune system in its response to cancer.

This is demonstrated by our consistent observation that IL-12 turns cold tumors hot, and we are building on this strong biomarker in brain cancer.

That is why we are pushing it forward as a monotherapy and in combination with checkpoint inhibitors and why we are confident about proceeding with Regeneron as a new partner.

There may also be opportunities for combination therapy outside of brain tumors.

For -- in combination with our controlled IL-12 platform, we may make PD-1 inhibitors, which only work on about 30% of patients, much more effective on the other 70% of nonresponders.

Net-net, this platform is a large opportunity for Ziopharm.

Obviously, there was a lot of groundwork done over the last year to get us here today, and we have crossed a massive chasm to get where we are now compared to where we were just a month ago.

We pushed for and secured our independence for Ziopharm and all of our constituents.

Our programs continue to create value.

And CAR-T, TCR-T and IL-12 will all be in the clinic next year.

We are working with the best in the world at our side.

We have a new partner in Regeneron and expect more partnerships to be announced going forward.

These are the assets we wanted to move forward with.

We went after them with a clear plan and we succeeded on all fronts: TCRs, check.

The 2 most clinically validated CARs, check.

IL-12, check.

Autonomy, new board, path to sublicensing freedom, check, check, check.

We remain partners with Intrexon and Precigen under the new license agreement and what we believe is a fair and equitable outcome, with both companies free to pursue their own paths.

We each benefit from the other's work, with revenue sharing going both ways upon success.

Given the clinical stage and scientific platform behind our assets, existing and future targeted partnerships and a fully transformed balance sheet, we believe Ziopharm is significantly undervalued, especially when you compare us to some of the other companies out there with earlier-stage ideas, each of whom will face tremendous headwinds with regards to scale, cost and complexity.

We are extremely confident in our science and our ability to execute under our independent structure with our enhanced balance sheet.

And we have a new ability to build a world-class team, all of whom will fight for our shareholders, and you should absolutely expect that of all of us going forward.

With that, I turn it back to Dr. Cooper.

Thank you, David.

We greatly appreciate all your efforts.

It is indeed a bright, new day.

Since we recently updated the investment community, I'm going to be fairly brief regarding our clinical programs.

Controlled IL-12 with the RheoSwitch to regulate IL-12 production is being evaluated in adult and pediatric brain tumor trials as a monotherapy and is currently being tested in combination with PD-1 inhibitors for patients with recurrent glioblastoma.

Enrollment in our expanded monotherapy trial is progressing.

This trial seeks to increase the number of adults with recurrent GBM who receive what we believe to be the ideal dose of veledimex, which is 20 milligrams.

And we have already dosed 12 new patients, on our way to 25, in this trial.

We expect this study to complete enrollment in the first quarter of next year.

Previously, we have shown a median overall survival of 12.7 months at a mean follow-up of 12.9 months, which favorably compares to historical controls.

Indeed, as a reminder, these controls show us that patients with recurrent glioblastoma live on average only 5 to 8 months after occurrence despite all available therapies.

Our data further reveals that patients on low-dose steroids may have an additional benefit in terms of overall survival, and we are testing this in the expansion cohort.

We know IL-12 makes cold tumors hot.

Specifically the brain tumor biopsies before an IL-12 -- before and after IL-12 demonstrates that this cytokine recruits CD8-expressing T cells.

These CAR-T cells are likely the reason patients with recurrent GBM appear to be living longer after IL-12 as monotherapy.

We've also seen that these invading T cells increased PD-1 checkpoint expression within the tumor.

This helps convince us that combining with an immune checkpoint inhibitor against PD-1 will further improve the antitumor effect we have seen with IL-12 as monotherapy.

Studies joining IL-12 with anti-PD-1 are picking up steam.

Earlier this year, we launched a Phase I trial for recurrent GBM combining our controlled IL-12 platform with nivolumab.

This trial is now recruiting patients into the second treatment cohort with the goal of enrolling up to 18 patients in total.

The enrollment should be completed in the second quarter of next year.

And preliminary indication is that these patients are doing well and we're following them closely.

We're excited to begin our work with Regeneron.

With this new collaboration, we're evaluating controlled IL-12 platform in combination with Regeneron's PD-1 antibody cemiplimab for recurrent GBM in a Phase II safety and efficacy trial.

This further validates our platform and strategy to improve upon the potential therapeutic efficacy of IL-12 in combination with immune checkpoint inhibitors.

As we announced last week, we're presenting a poster on November 16 at the annual meeting and Education Day of the society of neuro-oncology or SNO, which is in New Orleans.

Our presentation will include updated survival data for a group of 15 patients who received Ad-RTS-IL-12 during surgical resection, with a 20-milligram dose of veledimex; as well as the group of patients who received stereotactic administration of controlled IL-12.

We'll present additional analysis of the effect of steroid dexamethasone, as our previous data suggested that reduced doses of this steroid improved patients' overall survival.

The new Ziopharm is also focused on developing nonviral Sleeping Beauty autologous or patient-derived TCR-T and CAR-T cell therapies.

These personalized therapies are designed for and made for each patient.

Our technology allows for a scalable, faster and less-expensive manufacturing process in comparison to viral-based cell therapies.

The clinical data is growing to support Sleeping Beauty with this potential to deliver these autologous TCR-T and CAR-T therapies.

There are several key competitive advantages of the Sleeping Beauty platform.

It is the most clinically advanced nonviral gene therapy technology and our plasmid DNA system can be considered to have the following 2 benefits.

The first is the very rapid, "less than 2 day" manufacturing of genetically modified T cells.

As a reminder, this is based on expression of membrane-bound IL-15 and CAR.

The methodology addresses the current expense and complexity associated with delivering autologous CD19-specific T cells generated with virus.

The second is the scalability to cost effectively produce TCRs targeting neoantigens within solid tumors on a patient-by-patient basis.

This has additional importance as patients with solid tumors will likely require T cells expressing more than 1 TCR.

The Sleeping Beauty system has a major advantage of a virus of expressing a TCR for one patient, and this advantage becomes greater when multiple TCRs are needed for each patient to target their solid tumors.

With the National Cancer Institute, we have paved the way to reengineer a patient's T cells specifically designed to attack their own solid tumor using our nonviral system.

The process from sequencing to identify the neoantigens, to expressing the TCRs into T cells with the Sleeping Beauty system has been accomplished under Dr. Rosenberg's leadership at the NCI.

They will be submitting the IND and in position to infuse these patient-specific therapies by mid-2019.

Thus, Ziopharm will likely be the first company using a nonviral approach to manufacture TCR-T to target solid tumors.

Of note, we know that allogeneic or off-the-shelf sources of T cells are unlikely to meet the challenge of TCR-T.

In conclusion.

We're fighting to get back the valuation that our shareholders deserve.

We now have the financial backing to execute on our game-changing technologies, and investors can look forward to the following milestones: data on controlled IL-12 platform at SNO on November 16, which will update on the overall survival with patients with recurrent glioblastoma; next, continued enrollment in our expansion trial evaluating controlled IL-12 platform as monotherapy with -- for recurrent glioblastoma, with completion in the second quarter of 2019; next, enrollment in Phase I and Phase II trials combining PD-1 inhibitors with controlled IL-12 platform, with completion of a Phase I trial in the second quarter of 2019 and new partnership with Regeneron to start a Phase II trial in the first half of 2019; next, continued enrollment on the second-generation trial infusing Sleeping Beauty modified T cells expressing a CAR targeting CD19; next, continued work on the so-called point-of-care program to manufacture Sleeping Beauty modified T cells expressing a CD19-specific CAR and under 2 days; next, enrollment in a first-in-human trial by mid-2019 at the NCI for patients with solid tumors to receive Sleeping Beauty modified T cells expressing TCRs targeting neoantigens; and next, looking forward to a new partnering opportunity, with details to come.

That's a lot.

And with that, let me turn back the call to the operator for questions.

(Operator Instructions) Our first question comes from the line of Ren Benjamin of Raymond James.

Congratulations on the continued transformation and investment.

I guess I have a couple of questions, maybe starting off with maybe a 10,000-foot-view question.

There are a lot of learnings that have been coming out over the last months between ESMO and just this weekend at SITC really trying to hone in on the issues that's impacting the cell therapy space and especially in solid tumors.

And so while watching the hurdles that the first movers hit, obviously, fast followers can utilize those learnings and really try to navigate around that.

So can you talk maybe a little bit about what you're seeing?

Persistence is one of the big issues that hits me, but what are you seeing?

And how do you think the platform might be able to overcome these issues?

Yes, it's a great question.

So the first is that it's necessary to be able to deliver a product, right?

Many folks are interested in targeting solid tumors, whether that be through a vaccine approach, which we could get into, or importantly, I think, most significantly, by administering T cells.

So unless you're a company that could administer T cells, you can't address any of the other downstream questions that you're getting into in terms of solid tumors.

So Ziopharm has that key to unlock the door.

We have the technology where we can make patient-by-patient TCR modified T cells to get to solid tumors.

And that's going to be, I think, the first gating principle.

The rest is noise.

Unless you can make the T cells on a cost-effective patient-by-patient basis, you can't even address the second questions.

Then the second questions, though, are essentially derisk for us because we are using the technology at the NCI which has already been shown to work.

Let's not forget that there are major papers, whether they be in Science, New England Journal of Medicine and so on, that show that the manufacturing process at the NCI to generate the T cells, in other words, the TIL, the tumor-infiltrating lymphocytes that are grown up and are infused, those result in dramatic antitumor effects for patients with solid tumors.

The issue is that it doesn't work all the time because they're not using genetically modified cells.

They're using T cells from the tumor that have been essentially exhausted in many cases.

The Sleeping Beauty system is the link to take those T cell cluster which we know had worked in the past, that they used in that programming or used in that technology at the NCI, and then insert them into these fresh, younger T cells.

So for Ziopharm, we're in great shape.

We have the gating technology to be able to go after it, and we have the -- essentially the manufacturing solution through the NCI which has already been proven to work.

Yes.

This is David.

I would also add that, for the headwinds we're seeing in the CAR space where you're going after a single CAR target, it all comes down to commercial viability.

And we're already seeing the headwinds for commercial viability even with decent science.

We expect those headwinds to be magnified when we think about multiple TCRs on an individualized patient basis.

And so whether you're in bioinformatics or sequencing or anything else, if you can't deliver a commercially viable product, you're stuck, and we think we enable that capability.

So just to expand on one comment that Laurence had made regarding those fresh cells.

Can you just remind us where the cells that you'll be transmuting using the Sleeping Beauty system are coming from?

Yes.

It's from the peripheral blood.

So in the mind's eye then, the technology is based on taking these neoantigen-specific TCRs.

In other words, the TCRs recognize the fundamental genetic lesion that gives rise to the cancer.

Those TCRs are then taken and put into the Sleeping Beauty cassette system, which is really like LEGO blocks.

You can just insert one TCR after another into the plasmid backbone.

And then the Sleeping Beauty system is used to insert the TCRs into fresh T cells that are swimming in the circulation in the peripheral blood.

Got it, okay.

And can you just remind me, have we ever seen clinical data from cells that have utilized the Sleeping Beauty system?

I thought that the original CD19 program was supposed to provide that bridging data, but maybe I'm just remembering incorrectly.

Sure.

So we've shown several updates.

So one is that we have a paper out in JCI that talks about the survival of patients who received Sleeping Beauty modified T cells expressing CAR targeting 19.

Then we updated at ASH, showing essentially, I think it was, something up to 4 years of survival and up to 4-year persistence of those CAR modified T cells in subsets of patients.

Then we updated on the second-generation Sleeping Beauty trial, and we had a press release out showing, for instance, patients entering into complete remission.

The PET imaging, I think, we showed at that point showed the tumor going away and so forth.

So the Sleeping Beauty has a lot of clinical rhythm to it.

There's additional work ongoing at MD Anderson where we are essentially preparing for this very rapid manufacturing solution shortening the time essentially between vein to vein.

That trial has a number of updates that we will give over the coming months to year associated with that clinical data.

And then the last, of course, is that the NCI is rapidly using the sleeping -- system, and they are in essentially their ramp-up phase for submitting the IND there.

Got it.

And then just one final question for me.

One of the programs that I don't see in your pipeline that I thought you guys had involved CAR NK cells.

And so we got quite some -- we got some interesting data from SITC showing some pretty profound responses in indications like AML.

And so I just -- am I remembering wrong that you had a CAR NK program?

Is that have gone away...

Yes, we had -- yes.

Good memory.

So we had an NK cell program that we thought about for a while in terms of it being used in certain clinical scenarios like, for instance, off-the-shelf therapy.

That program still exists for us.

We can execute on that.

We have a relationship with Precigen to move on that, but at the moment, it's not part of our core set.

We're essentially aligned behind what really is, I think, the very large opportunity in solid tumors.

And CAR, in our mind, whether it's on an NK cell or a T cell, is not going to get you into the solid tumor space.

You -- there's no target that the CAR targets for solid tumors.

Our next question comes from the line of Eric Joseph with JPMorgan.

I -- a couple of pipeline questions from me.

First, on the IL-12 program in GBM.

I'm just looking for a little bit more color on the cemiplimab supply agreement and sort of what the particular rationale is to collaborate with Regeneron given that you already have a Phase I ongoing with nivolumab.

Is there something particular about their PD-1 versus nivolumab that's particularly attractive or something in terms of resources that Regeneron is bringing to the -- bringing to you in terms of clinical development?

And I guess, wondering if there are any additional economics beyond the supply that are tied to the IL-12 program.

And then I have a follow-up...

Yes, thank you for that.

So the -- we were anxious to start a combination trial and chose nivo because that was approved and that got us going.

And that -- a lot of learning is ongoing in that trial.

That learning has guided us now to essentially go from a Phase I to a Phase II trial.

And as we position that, we discovered to our delight and -- that Regeneron's cemiplimab, their PD-1 inhibitor, was also going to be approved.

So we transitioned the program from that Phase I to that Phase II trial with cemiplimab with a supply agreement with Regeneron because essentially we have alignment with them on targeting recurrent GBM.

They, like us, see recurrent GBM as a major opportunity, and I think that's really a lot of the driver that got us excited about working with them.

I think also -- this is David.

I think one of the interesting things about a company like Regeneron and with the new market -- new player in the checkpoint inhibitor market, they're very aggressively looking for new advantages, new opportunities.

And so as a company with that mindset, it puts us in a position to be excited to have multiple shots on goal.

As far as your question on additional economics, we can't give any guidance on that at this point.

Okay.

And just on the TCR-T program.

I'm wondering whether the 70% cell viability threshold similarly applies to the TCR-T the way it has for the CAR-T point-of-care program.

And if so, has that been demonstrated...

Yes, that's a great question.

So yes.

So really across the board, the FDA is asking for 70% viability.

I mean you saw, for instance, Novartis come out with a statement around the viability of their T cells that have been made using their viral approach.

So when -- so in the CAR-T program, the goal is to essentially electroporate the cells with the Sleeping Beauty plasmids and then immediately infuse them.

So there's no possibility to grow out, if you would, healthy T cells.

And so that puts stress on the system that we're solving to essentially generate a process, a "less than 2 day" process, in which the cells come out of the technology 70% or greater viability.

The NCI process with the TCR involves propagating the cells after the gene modification, so you have time to essentially grow out the living cells, the viable cells.

And I would add that's the same that's ongoing in our second-generation CAR-T trial at the MD Anderson.

That trial, for instance, regularly spits out cells that are greater than 70% viable.

That's -- the viability is not an issue there.

And similarly at the NCI, when you propagate the cells, the viability is not going to be an issue.

It's really confined to this very rapid, "less than 2 day" manufacturing, and essentially the -- we're at the very limits essentially of next-generation technology.

And that's part of the puzzle is cracking -- is it providing solution to crack that problem.

Got it.

That's helpful.

And did I hear correctly that you -- that NCI expects to be in the clinic in mid-2019...

Correct.

That sounds like a bit of a delay, I guess, from prior guidance of being in the clinic this quarter or...

No, no.

It's essentially we're actually tightening up the guidance.

We said that -- in our guidance that it will be a 2019 clinical program, and we're actually narrowing it down now and saying it's going to be mid-2019 to treat patients, yes.

Thank you.

I'm showing no further questions at this time.

I'd like to hand the call back over to Dr. Cooper for any closing remarks.

Great -- no.

Thanks, everyone.

Look, this is a really exciting time for us.

We have the money.

We have the technologies.

We have the people.

We have the board to deliver on expectations, and we are just delighted to come to work every day on behalf of shareholders and our patients.

So thanks, everyone.

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

That does conclude today's program.

You may all disconnect.

Everyone have a great day.