2Seventy Bio Inc (TSVT) 2024 Q3 法說會逐字稿

Good day.

And thank you for standing by.

Welcome to the 270 Bio third quarter, 2024 earnings conference call.

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I would now like to hand the conference over to your speaker today, Morgan Shields in corporate communications.

Please go ahead.

Thank you, operator.

Good morning, everyone.

And thank you for joining us this morning.

We issued a press release on our third quarter, 2024 financial results.

The press release can be found in the investors and media section of the company's website at 270 bio dotcom.

As a reminder, today's discussion will include forward-looking statements related to 270 Bio's current plans and expectations which are subject to certain risks and uncertainties.

These forward-looking statements include statements regarding our strategic plans, timelines and expectations with respect to sales efficacy and perceived therapeutic benefits of abecma and statements regarding our financial condition, expectations and future financial results among others, actual actual results may differ materially due to various risks uncertainties and other factors including those described in the risk factor section of our most recent form, 10-K quarterly reports and other sec filings.

These forward-looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date.

You are cautioned not to place any undue reliance on these forward-looking statements and except as required by law, we undertake no obligation to update or revise any forward-looking statements on today's call.

We are joined by Chip Beard, Chief Executive Officer and Vicky Eatwell, Chief Financial Officer and now I will turn it over to Chip Chip.

Thank you Morgan and thank you all for joining today's call.

It's hard to believe that we have six weeks left in 2024.

Looking back, we've navigated a tremendous amount of change at 270 this year.

As a reminder, we ended 2023 with 277 employees a burn rate of 63 million in the fourth quarter of 2023.

And uncertainty surrounding Abecma's earlier line approval on return to growth in 2024.

We've accomplished a tremendous amount to improve this picture.

We've successfully completed the sale of our oncology and autoimmune R&D pipeline to Regeneron, including about 160 employees.

The majority of our real estate footprint for the next several years, we sold our hemophilia a program and related technology to Novo Nordisk for 40 million.

We received FDA approval in the third line setting, making aema available to more patients living with multiple myeloma.

And we've achieved a significant return to growth for a backline with third quarter US revenues growing 42% over the prior quarter.

The net result of these changes is that we have streamlined the company focusing the business exclusively on Abecma and continuing to make meaningful progress towards our goal of breakeven operations.

Our burn rate was approximately 10 million this quarter and we have 70 employees, the majority of whom are funded through the Abecma Coco Agreement with Bristol Myers quid.

Looking ahead, we're going to focus on two key priorities for a backline.

First, we're going to continue to completely we're going to continue to compete commercially.

AMA has an important place in a growing car t market in third line.

Myeloma.

Recent real world evidence studies underscore that Abacha has a well established and differentiated safety profile and has a competitive efficacy profile particularly when patients receive effective bridging therapy prior to treatment.

Second, we are working on optimizing the cost structure of the document to increase the operating margin, cash flow from the business.

The decision to discontinue enrollment in the Carmen nine study is an example of the kind of financial discipline we will continue to apply across the business together with B MS.

We are looking carefully at ways to streamline expenses across clinical manufacturing and commercial.

As we approach 2025 we are one step closer breaking even.

And as we've said, this creates strategic optionality for 270 we'll have more to say when we get there, we're to focus on delivering for patients and creating value for shareholders will remain our true north as we move forward, we'll get to Q&A shortly, but for now, I'll turn it over to Vicki to talk further about the third quarter results, Vickki.

Thanks Chip third quarter.

Back my US revenue as reported by B MS were $77 million which reflects ongoing expansion in the third line setting.

As Chip said, this was a strong quarter for us backa revenue growth and we look forward to continuing to deliver this important therapy to even more patients living with multiple myeloma.

We also acknowledge that the multiple myeloma market continues to be one that is dynamic and competitive.

We expect us aema revenues to be approximately 240 to 2 50 million for 2024.

With the fourth quarter expected to be impacted by the continued competition and a reduction in car t infusion scheduled during the US holiday season.

As a reminder, we share equally in the profits or losses of the US affect the business with B MS and we record collaboration arrangement, revenue or loss each quarter, which largely represents our 50% share of revenue COGS and selling expenses related to the US business.

In the third quarter, we reported collaborative arrangement revenue of approximately $11 million related to our collaboration with B MS.

Turning briefly to our cost structure.

This quarter, we achieved a $10 million or 24% reduction in GAAP operating expenses versus the prior quarter and a $140 million or 52% year-to-date reduction in GAAP operating expenses versus the same period last year, primarily driven by a reduction in R&D expenses.

As we said before, we expect operating expenses to continue to decline in 2025.

As our team prioritizes streamlining of our cost structure for both ABECMA and our supporting corporate functions.

We continue to expect net cash spend in the range of 40 to $60 million for 2024 and cash runway beyond 2027.

With that, I'll turn it back to Chip.

Thanks Vicki.

As we close, I want to reiterate that we are encouraged by strong growth in AMA sales this quarter and are proud to have executed on what we set out to do at the beginning of this year, bringing us one step closer to break even potentially as soon as 2025 we believe in the potential of Bema to make a meaningful impact on the lives of patients and their families and plan to expand E Bema's reach to as many multiple myeloma patients as possible.

I want to extend a heartfelt.

Thank you to our people who are working hard to deliver on our mission to deliver more time to patients and their families.

With that.

We're happy to take questions, operator.

Thank you.

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Please stand by while we compile the Q&A roster.

Our first question comes from the line of Dana Graybosch with leading partners.

Your line is now open.

Hi guys.

Thanks for the question.

I wonder now that we've been a couple quarters into this earlier line sales.

If you could tell us any of your reflections on the market.

I guess specifically how it differs in terms of demand in in total, not just for a back month than you had anticipated.

And any earlier line that were surprises to you.

Dana.

Thanks for the question.

Yeah, I would say that the demand is what we expected.

You know, different than the original launch in in fourth line plus where there was a bolus of patients.

I think this has been more of a steady build.

When you look at the overall car T class share, you know, between the two commercially approved products.

We had a big step forward here in the third quarter.

I think that's driven both by step ups in a combined manufacturing capacity, as well as more sites coming online and being in a position to deliver car T to patients as well as just continued awareness in earlier lines.

Third line setting of of car t of the benefit of car t of sequencing of car T relative to T cell engagers.

So there's no one stock answer.

But I think what we've been encouraged by is the steady growth and pick up in car T class share.

And again, our view with the back is that we need to and we'll continue to compete for our, our place in that share.

And I know you've, you've written about that.

And we were pleased to see that particularly around recent news, but you know, we, we have a meaningful share there.

We have a differentiated safety profile.

We have patients for whom we think a back my eye can be the right treatment option.

And you know, and I think the last thing I would just comment is if you look at the exit, Trj Jacky from the third quarter, we're still by our math, less than 25% penetrated into the overall third line setting.

If you assume third line represents something like 16,000 patients in the United States.

So our view is that.

There's still plenty of room to grow and plenty of more patients to get to and, and we're committed to trying to do that.

So, thanks for the question.

Thank you.

Our next question comes from the line of Salveen Richter with Goldman Sachs.

Your line is now open.

Hey, thanks.

This is Matt on for Salveen.

Was hoping you could speak to what drove the better margins for the Abecma profit share and then separately, it is 400 million in Abecma still the estimated break even point for the overall business.

And then finally, kind of given what you've guided to now for four Q.

How do you think you're positioned heading into 2025?

Thank you.

Matt, thanks for those questions.

I'll ask Vicki to comment on margin and break even in terms of positioning, you know, heading into 2025.

You know, we've guided here, we expect to end 24 of the 242 $50 million range for total back my UF sales not yet guiding for 2025 but as I said in the prior question, we, we certainly have been encouraged by car T class share growth and are are leaning into continue to participate in our share of that.

But Vicki, do you want to comment on margin and third quarter margin and then breg break even?

Yeah.

Thanks for the question I would say on the margins, we continue throughout this year, we've really continued to make steady progress on improving those margins.

It's largely driven by demand.

So obviously, a strong sales quarter pulls through to from a margin perspective.

Given the high fixed cost nature of the business, I will say too that we've continued to with our partners at B MS make manufacturing improvements.

So we see really strong manufacturing success rate north of 95%.

And so that obviously helps as you translate that into margin on the break even question.

That's a good one.

And in the past, as you, as you noted, Matt, we've, we've guided to about 400 million being the break even sales point for and that's a total us sales for 270 as a whole.

We think it's closer to 300 million as we sit here today.

But we're very much in, in process of evaluating what we think for 2025.

And so we'll be able to comment more on that on that later.

But closer to 300 is what I would guide.

Thanks, ma'am.

Thank you as a reminder to ask a question at this time.

Please press star 11 on your touchtone telephone.

Our next question comes from the line of Samantha Seino with city.

Your line is now open.

Hi, good morning.

Thanks very much for taking the question.

I appreciate the 2024 guidance.

And that seasonality is, is a big part of that.

I'm wondering if you could just speak a little bit on the rates that you've seen thus far in four Q and how they compared to the increase you on through Q and, and how we should think about that, trajectory carrying over into 2025.

Thanks very much.

Yeah.

Hi SAM.

Thanks for the call.

I mean, thanks for the call.

Thanks for the question.

Thanks for being part of our call.

The Yeah, the rates.

You know, that's something that we, we track on a weekly basis.

And again, we were very encouraged to see the growth in apes in the third quarter.

As we sit here in the fourth quarter, again, II, I would say to the comments on the call, you know, there is seasonality that occurs particularly as think about as people think about where they're going to be, where when they receive those cells and they head into Thanksgiving Christmas those times.

You know, that that can be the intensive part of the car t treatment journey for patients.

And so, you know, I, I think that's we, we do see that that being said, I think the underlying demand and, and the kind of uptick we've seen since the third line approval back in March has been a real one and that's one that, you know, together with B MS, we're doing everything we can be doing, we should be doing to support commercially.

So, again, I think we'll have more to say about 2025 at a later date.

But, you know, certainly have been encouraged.

And, and really happy with the growth we've seen here in the third quarter.

Thank you.

And I'm currently showing no further questions at this time.

I'd like to hand the call back over to Chip Baird for closing remarks.

Thanks, thanks operator and thanks to everyone for participating in the call today.

We appreciate the time and have a great day.

This concludes today's conference call.

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