Alaunos Therapeutics Inc (TCRT) 2021 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Alaunos Therapeutics Fourth Quarter and Full Year 2021 Financial Results Conference Call. (Operator Instructions)

I would now like to turn the call over to your host, Alex Lobo, Stern Investor Relations. You may begin.

Good morning, and welcome to Alaunos Therapeutics Fourth Quarter and Full Year 2021 Financial Results Conference Call and Audio Webcast. With me today are Kevin Boyle Senior, Alaunos Therapeutics' Chief Executive Officer; Drew Deniger, Vice President of Research and Development; and Mike Wong, our Vice President of Finance.

Earlier this morning, Alaunos issued a press release announcing financial results for the 3 months and full year ended December 31, 2021. We encourage everyone to read today's press release as well as the Alaunos Annual Report on Form 10-K for the year ended December 31, 2021, which was filed this morning with the SEC.

The company's press release and annual report will also be available on the Alaunos website at alaunos.com. In addition, this conference call is being webcast through the Investor Relations section of the company's website and will be archived there for future reference. Please note that certain information discussed on today's call is covered under the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Participants are cautioned that this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 30, 2022.

Actual results could differ materially from those stated or implied by forward-looking statements made today due to risks and uncertainties associated with the company's business. Information on potential risks and uncertainties are set forth in our most recent public filings with the SEC at sec.gov. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this webcast, except as may be required by applicable securities law.

With that said, I would like to now turn the call over to Kevin Boyle. Kevin?

Thank you, Alex, and welcome, everyone, to the Alaunos Therapeutics Fourth Quarter and Full Year 2021 Earnings Call. It has been just over 6 months since I joined the company and in that time, we have made great strides advancing our novel TCR-T program for the treatment of solid tumors.

Our vision for the year is all about execution and delivering clinical results. I'm very proud of the team as we have made meaningful progress across both our clinical and preclinical pipeline, all the while being good stewards of capital and significantly reducing spend.

I want to begin by reiterating the confidence that we have in weaponizing our TCR-Ts to attack solid tumors. Our team is motivated to treat patients and translate our expertise and unique scientific approach into clinical progress. We appreciate the importance of generating clinical data to validate our TCR-T platform and create shareholder value.

Our TCR-T Library study is a basket trial targeting hotspot mutations across 6 solid tumor indications, non-small cell lung cancer; colon, rectum, endometrium, pancreas, ovary and bile duct cancers. This study is an open-label dose escalation study being conducted at MD Anderson Cancer Center, and we'll enroll patients with one of these 6 cancers based on matching neoantigen, HLA pairings that are available in our TCR-T Library.

In December, we further amended the study's IND application to include evaluation of an additional 4 TCRs. Our library now has a total of 10 TCRs: 4 KRAS, 5 TP53 and 1 EGFR. The addition to the library further increases the addressable market and pool of patients eligible for the trial.

Once enrolled, patients will be infused at 1 of 3 dose levels with autologous T cells that have been engineered to express TCRs using our Sleeping Beauty transposon technology that are reactive against such mutated neoantigens. We believe that this adaptive trial design is an optimal approach to advancing our TCR-T Library as it should allow us to rapidly identify the recommended dose and then cost-effectively advance multiple indications in the clinic.

We are one step closer towards value creation as we have consented the first patient in our study and anticipating treating our first patient in the second quarter. The manufacturing for this trial will be performed at our own state-of-the-art cGMP manufacturing facility, which we built in 2021.

This facility has been fully qualified and is staffed entirely by Alaunos personnel for the manufacture and release of clinical product. The current anticipated capacity in the cGMP suite this year allows for the manufacture of approximately 1 product per month.

Before I turn the call over to Drew Deniger, our Vice President of Research and Development, for an update on our preclinical programs, I would like to thank Raffaele Baffa for his service to the company. As per our 10-K filed earlier today, Raffaele will depart his role as Chief Medical Officer effective tomorrow. His contributions over the last year to update the clinical trial design for our Phase I/II TCR-T Library study and successfully amend the IND application have helped position Alaunos for success.

Raffaele remains a shareholder and firm supporter of the Alaunos TCR-T platform. We wish him all the best on his future endeavors. We have engaged a consultant with over 30 years of experience in clinical and drug development, and we will also leverage the expertise of our Board member, Dr. Chris Bowden.

I'd like to turn the call over now to Drew to highlight our research and development efforts. Drew?

Thank you, Kevin. Earlier this month, we announced an extension to our cooperative research and development agreement with the National Cancer Institute. This CRADA will focus on evaluating our TCR-T platform in a personalized TCR-T setting targeting solid tumors.

In addition to our internal efforts and those with the NCI to advance our clinical programs, we are focused on expanding our research and development efforts. One of these areas is IL-15, which is a cytokine that supports survival of T cells and other immune cells.

We have developed the co-expression of TCRs with a more potent and proprietary membrane-bound IL-15. This translates to increased survival of TCR-T cells in the absence of other supporting signals, especially in T memory stem cells present in the manufactured product. We believe this has the potential to augment TCR-T cell therapy and deepen clinical responses targeting hotspot mutations expressed in solid tumors.

We recently filed an international patent application around this technology, covering these developments with TCRs targeting hotspot mutations. As we work to advance this program towards an IND filing in 2023, we plan to showcase new preclinical data at a major scientific conference later this year.

In addition, we also recently highlighted our human neoantigen T-cell receptor platform, or hunTR, which is our TCR discovery engine. We are focused on tumors expressing hotspot mutations and using tumor infiltrating helper and killer T-cells. We do in-depth sequencing of thousands of individual T-cells simultaneously to create 10,000 by 20,000 matrix, which then can be reduced down to 2 dimensions using state-of-the-art bioinformatics.

The identified TCRs can be rapidly tested against neoantigens and added to the clinical library. It is our goal to further expand the TCR library this year and increase the addressable market for our cell therapy.

I would now like to turn the call over to Mike Wong, our VP of Finance, to review the financial results for the fourth quarter and full year. Mike?

Thank you, Drew. Let me review our financials for the 3 months ended December 31, 2021. For the fourth quarter 2021, we reported a net loss of approximately $11.8 million or a $0.05 net loss per share compared to a net loss of approximately $22.8 million or an $0.11 net loss per share for the fourth quarter 2020.

Research and development expenses were approximately $8.2 million for the fourth quarter of 2021 compared to approximately $14 million for the fourth quarter 2020, a decrease of 41%.

General and administrative expenses were approximately $2.1 million for the fourth quarter of 2021 compared to approximately $8.8 million for the same period in 2020, a decrease of 76%.

And now I will review the results for the full year ended December 31, 2021. For the full year ended December 31, we reported a net loss of approximately $78.8 million or a $0.37 net loss per share compared to a net loss of approximately $80 million or a $0.38 net loss per share for 2020.

Research and development expenses decreased by 6% to approximately $49.6 million in 2021 compared to approximately $52.7 million in the prior year. This was primarily attributable to lower program-related costs as a result of the winding down of our controlled IL-12 and CAR-T programs.

For the full year 2021, general and administrative expenses were approximately $27.6 million compared to approximately $27.7 million for the full year 2020, a decrease of $0.1 million. The decrease was primarily attributable to reduced professional services costs. As of December 31, 2021, Alaunos had approximately $76.1 million in cash and cash equivalents. Cash burn for the full year 2021 was $61.5 million. We anticipate our cash runway to be sufficient to fund operations into the second quarter of 2022.

That concludes our financial update. I would like to hand the call back over to Kevin for closing remarks.

Thank you, Mike. Our talented and dedicated Houston-based team is working hard to transform our innovative scientific research into clinical progress. Over the course of 2022, we remain focused on execution, and we look forward to dosing the first patient in our Phase I/II TCR-T Library trial in the second quarter of this year.

We are also working diligently to advance our membrane-bound IL-15 program towards an IND filing in 2023 and expect to present at a major scientific conference later this year. We believe that focusing on execution and delivering clinical data will result in shareholder value creation. We will also continue to evaluate partnering opportunities for our noncore controlled IL-12 and CAR-T assets.

With the strategic restructuring completed last year, headcount has been reduced from 112 people when I arrived in August to a team of approximately 40 today.

We continue to be good stewards of capital and expect operating cash flow for 2022 to be between $40 million and $45 million, a significant reduction year-over-year.

Recognizing the progress that has been made over the last 6 months and as a further vote of confidence, James Huang has changed his role from Executive Chair to Chairman of the Board.

I've appreciated the guidance and accessibility of James, and I look forward to our continued partnership in the year ahead. The progress made would not be possible without many, and I am grateful for our team, shareholders and partners for their continued support.

We will now open the call to questions. Operator, Kevin?

(Operator Instructions) Our first question comes from Chris Howerton with Jefferies.

Excellent. I appreciate all the progress that was detailed on the call today. I guess maybe a high-level question would be in terms of kind of clinical development plans moving forward in terms of how they were previously articulated with under the leadership of Raffaele and how you may anticipate that being influenced with a new CMO in the near-term future? So that would be one question.

The second question I would have if possible would be, I note, Kevin, it was really helpful to better understand the current kind of library that you have in terms of TCR-Ts. Just curious if you could give us some indication in terms of cadence of bringing in new TCR-Ts, for example, to bring up additional HLA matching for EGFR, for example.

Great. Thank you, Chris. We're very pleased with the direction that Raffaele assisted us with, with regards to clinical development. I believe we have a very strong and unique IND now in place and clinical development plan. So I do not foresee wholesale changes with regards to a change in leadership at that level.

We're still very much excited and focused on accruing patients at MD Anderson in our Phase I/II trial, and that's going to be our focus this year and preclinically continuing to make progress, so we can enter the clinic in 2023 with our membrane-bound IL-15.

So we will continue to leverage Chris Bowden, who is a very experienced CMO and a very active board member. And so we will work closely with Chris to make any adjustments or pivots as data comes in on the trial and to continue to read from a clinical standpoint.

With regards to the cadence of the expansion of the TCR Library, certainly, it's our goal to both increase the mutations that we're going after. You highlighted EGFR in particular, and we currently do have one TCR in our library that targets EGFR. This hunTR program is really exciting, and we will continue to identify new TCRs through that program. To qualify those TCRs and to get them added to the IND is not an insignificant progress -- or process, I should say, something that will take anywhere in the order of 6 to 12 months.

So from a cadence standpoint, knowing that we just stood up our hunTR platform, having been successful in identifying TCRs over the last few months with our hunTR platform, I think it's fair to say that we would not see an expansion of the TCR Library until the second half of this year at the earliest.

Okay. All right. That's great. I really appreciate it, Kevin. I -- maybe I'll ask it anyway. I don't know if others are going to ask. So with respect to the dosing levels that you've articulated in the Phase I/II study, any kind of commentary you'd like to provide around the rationale of those dose levels? And I guess just as a clarification, will that be kind of constant dose levels across the different TCR constructs that a different patient might see?

So we did a very -- before we set the dose levels in this study, we did a very expansive review of other companies' historical data and looking at dose levels that were out there. It was our belief that we wanted to try with a higher dose level, in general, a larger number of cells because in addition to safety, which, of course, is critical, it was really our goal as well to reach an efficacious level with regards to dosing.

We also have the unique [Beauty] gene design to accelerate through the early stages of the dose levels, Chris, and get to, again, a place where we believe we'll have a greater chance of efficacy. After all, the reason that we're doing this is to treat cancer patients. We want to make a difference in their lives, and we are so motivated to do that.

And so as a result, we really want to have a product that is both safe and efficacious. And with regards to dose levels, that's how we came up with the dose range that we have, working very closely with our PIs as well over at MD Anderson. And at this point, we would anticipate, regardless of the indication, that we're targeting the same dose level that we would have in the trial.

So we feel very comfortable with that. And we'll learn from it as well. As we know, this Phase I, we will learn from. And as we identify that Phase II dose level or Phase Ib dose, the optimum dose level, it might be different depending on indications, that's the learning we'll get from this Phase I trial.

Our next question comes from Arthur He with H.C. Wainwright.

This is in Arthur He for RK, and congratulations on the progress this quarter. Maybe I just want to follow up on the expansion of the TCR mutation. So my understanding is you guys are flexible to including more additional mutations into the current trial to expand that library instead of launching another different -- additional study. Is that correct?

I'll pass that to Drew, Arthur.

Yes. That is correct.

Awesome. And regarding the agreement with the National Cancer Institute, could you guys give more color on the extension of the agreement? And if that's applied to the personal TCR with the institution? Yes, any commentary is appreciated.

Yes. So with the NCI, that is going to be our partner for personalized TCR-T. So we will be doing our approach will be using the library approach, but the personalized TCR-T approach is what our partnership with the NCI will be doing. And we will be coming out later this year with more specific details around that.

As you're aware, the NCI just reactivated these trials. So we'll be as we continue our relationship and have some more time pass, we'll be able to communicate more broadly with our investors about that specific trial, and we'll look forward to providing updates further in -- later in this year.

Our next question comes from Thomas Flaten with Lake Street Capital.

Kevin, I just want to make sure I heard you correctly in the prepared comments around one product per month. Can I read that as -- from a manufacturing perspective, can I read that as one patient per month is kind of the theoretical max at this point from an enrollment perspective? Or how should we think about study pacing or enrollment pacing with respect to manufacturing capacity?

It's a great question, and you did read the words correctly in the sense that that's our capacity. I think it's very unlikely that you end up seeing a patient a month that could be done, but life happens. Not many patients that are ill, no matter how ill they are, going to want to be infused, let's say, between Thanksgiving and the Christmas holidays.

They want to be spending time with their families with -- for what might be their last holidays. There's insurance and scheduling and other things. So it will be our best, and it's our goal to as safely and quickly enroll patients that are appropriate for this trial. But we will also be working in our GMP suite advancing the preclinical program with IL-15.

So there will be other products. So what I would say is we anticipate a full 100% utilization in our GMP suite throughout the year. But I think it would be unrealistic to presume that we would have a patient a month, that's just not typically how it enrolls.

So we don't have specific guidance at this time, but knowing that we will be continuing to progress things both preclinically and doing other activities in our GMP suite, we do not anticipate a patient per month at this point, but we'll just have to see how enrollment proceeds.

And then with respect to -- so given that, and I know we had talked previously about there perhaps being the opportunity for data from the initial patients in 2022. Is that still feasible? And do you see that being only in the context of a scientific meeting? Or is that -- would you have some other way of releasing that data to the investment community?

Well, certainly, there's multiple ways, but I think the most credible way in the most likely way is at a scientific conference. We've spoken before a possibility about ESMO in September being an appropriate conference depending on the patients that we enroll, there might be an indication-specific conference that would be appropriate.

So I think we'll just play it by year. We'll work closely with our PIs as well to find the appropriate forum and we'll be in touch with investors appropriately about where we'll be presenting that data.

(Operator Instructions) Our next question comes from Yale Jen with Laidlaw & Company.

Congrats for the progress. The first question is that the first consented patient, could you give us a little bit more color in terms of what type of tumor he or she has?

I would love to, Yale, and thank you for your interest. We will communicate information at a later point with regards to that specific patient after we treat that patient and wait for the appropriate safety period would be the time that we will end up communicating with our investors and with The Street with more information about that patient.

Two quick ones to follow. The first one is that how many types of HLA so far you have in that 10 library prospect at this moment?

That's a good question. And one thing I want to point you to is that we do have on our website and in the corporate deck, a list of all 10 of the TCRs that are currently in our library on Slide 11 of that. So if you look there, and I'll let Drew answer the HLA question, but just do refer that we have tried to be transparent with our shareholders in that regard. But Drew?

Yes, it's 8 different HLAs for our 11 TCRs -- excuse me, 10 TCRs, I misspoke, 10 TCRs.

Great. And maybe the last question here is that your lowest dose is 5 billion cells. Should we consider that could generate -- potentially generate efficacy signal or simply that just for the safety reason you want to have a lower dose?

No. Thank you, Yale. I think it's quite typical that we're focused on safety at first to make sure that we have a product that's safe as we're infusing it for the first time. We would feel quite less if there ends up being any kind of efficacy signal and certainly wouldn't mind that for both the patient's sake and for ours. But at this point, as any Phase I trial, the primary focus is on having a safe product inside of a human.

I'm not showing any further questions at this time. And this also does conclude the presentation for today. Everyone, you may now disconnect, and have a wonderful day.