Adaptimmune Therapeutics - Earnings Call - Q1 2025

Transcript

Operator (participant)

And welcome to Adaptimmune's First Quarter 2025 Business Update Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal the operator by pressing star, then zero. I will now turn the call over to Juli Miller of Investor Relations for Adaptimmune. Juli, please go ahead.

Juli Miller (VP of Investor Relations)

Thank you. Good morning, and welcome to Adaptimmune's conference call to discuss our First Quarter 2025 Business Update. I would ask you to review the full text of our forward-looking statements from this morning's press release. We anticipate making projections during this call, and actual results could differ materially due to several factors, including those outlined in our latest filings with the SEC. Adrian Rawcliffe, our Chief Executive Officer, is here with me for the prepared portion of the call, and other members of our leadership team will be available for Q&A. With that, I'll turn the call over to Adrian Rawcliffe. Ad.

Adrian Rawcliffe (CEO)

Thanks, Juli, and thank you, everybody, for joining us today. We now have one full quarter of TECELRA sales under our belt, and I'm delighted to be able to share with you the momentum that we're seeing with this launch. With 21 patient apheres so far in 2025, 13 in Q1, and another 8 in the first part of Q2, we now feel confident sharing revenue guidance for the full year of between $35 million-$45 million in TECELRA sales. We believe this is attainable based on the number of patients we've seen through the treatment cycle, as well as the number of authorized treatment centers that we have up and running.

As of today, we have a total of 28 centers accepting referrals for patients for TECELRA, and it's very clear that we will have the full network of approximately 30 ATCs up and running by the end of 2025. This is approximately a year earlier than we expected when we launched. During these first few quarters of the TECELRA launch, we will continue to share key performance indicators in addition to net sales, such as the number of aphereses that I previously mentioned and the number of TECELRA treatments invoiced. We have invoiced for 14 TECELRA treatments in 2025 to date, with six in Q1 resulting in net sales for Q1 of $4 million. We have since invoiced for eight additional treatments in the first few weeks of Q2.

We've also continued to deliver 100% manufacturing success from our U.S. TECELRA manufacturing center in Navy Yard, Philadelphia, with all TECELRA doses released to date meeting specifications, with no capacity issues or constraints, and in the first quarter, our average turnaround time from apheresis to lot release was 27 days, beating our target of 30 days. On the payer front, we've seen effective patient access to TECELRA with no patient denials to date. So, in every aspect, the TECELRA launch is progressing exceptionally well, forming the basis for our projected $400 million of peak sales from our combined TECELRA and lete-cel sarcoma franchise. The team at Adaptimmune has remained focused, diligent, and absolutely committed to this successful launch.

Also, I'll remind you that the investments in people and infrastructure that we've put in place for TECELRA will be the same for lete-cel when approved, which we anticipate in 2026. We'll use the same ATC network and work alongside many of the same physicians. Lete-cel launch readiness activities are underway, and we are fully on target for a rolling BLA initiation by the end of the year. As you know, lete-cel has the potential to more than double the addressable patients in our sarcoma franchise, as we anticipate an indication for both synovial sarcoma and myxoid round cell liposarcoma patients whose tumor express NY-ESO. It's worth noting that given the ubiquitous nature of NY-ESO expression in myxoid liposarcoma patients, we do not anticipate the need for NY-ESO antigen testing in this population, further simplifying the patient journey and expanding the patient population.

We continue to review strategic options with Cowen as our advisors and are committed to explore all options that benefit patients and shareholders. We look forward to sharing more information on next steps in this process in the upcoming months. With that, I'll open the call for questions. Operator.

Operator (participant)

Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. And our first question comes from Marc Frahm from TD Cowen. Please go ahead.

Marc Frahm (Biotechnology Equity Research Analyst)

Hey, thanks for taking my questions. Just one thing, Marc. I'll keep to some of the numbers you just put out, and thanks for all of that clarity. It's just on the apheresis patients, on the apherese patients in the quarter so far, I know it's difficult for them to have been treated, but it is theoretically possible for some of them to have already been treated and invoiced. Those are all, but those eight, none of those are the eight patients who have been invoiced in the quarter as well, right? Is that correct?

Adrian Rawcliffe (CEO)

I don't have that, but I would doubt it. I think most of those are the patients from the prior quarter, although there could be one or so. Why don't I ask Cintia to address that? Cintia?

Cintia Piccina (Chief Commercial Officer)

Yeah, so the apheresis patients that we've had year to date, which is the 21, that includes patients that have been invoiced already in mostly March and April. You know, about, you know, at least about six of them probably have been invoiced already. But we would anticipate that the majority of them will be invoiced in the next month or so.

Marc Frahm (Biotechnology Equity Research Analyst)

Okay. And then just thinking forward on that apheresis number, you know, should we, you know, that's roughly half a quarter, so should we be thinking of kind of mid-teens total number of patients apheresed in Q2, or is there, you know, some reason based on maybe ATC startups and stuff like that to think about acceleration of apheresis throughout the quarter?

Adrian Rawcliffe (CEO)

I appreciate the voracious appetite for further information, but we're very comfortable with the sales range of guidance that we've provided for 2025, and we're very comfortable telling you what we've done, and we're not giving detailed breakdown by quarter of apheresis, invoice, double positive, or anything else. We'll carry on reporting the metrics that we've got, but we now feel very confident about the guidance that we have for the year of $35 million-$45 million for TECELRA sales.

Marc Frahm (Biotechnology Equity Research Analyst)

Fair enough. Thanks.

Adrian Rawcliffe (CEO)

Thanks, Marc.

Operator (participant)

The next question comes from Michael Schmidt from Guggenheim. Please go ahead.

Hey, this is Paul from Michael. Thanks for taking our questions. So just on TECELRA, given that we're, you know, about nine months out from the approval, is there anything you can alternatively tell us now about how the pace of patient referrals and screening has been trending in the most recent weeks, especially since you're trending to hit your 30 ATC goal faster than expected? And, you know, generally, would you expect that to translate to sort of incremental quarter-over-quarter growth, or would you expect maybe some seasonality coming in in the back half? Thanks.

Adrian Rawcliffe (CEO)

Yeah. Why don't we, why don't I, I'll ask Cintia to comment on that, that ramp up. Overall, I think we expect incremental growth quarter-on-quarter, but I'll let Cintia comment on the trends as we see them.

Cintia Piccina (Chief Commercial Officer)

Yes, thank you, Adrian. We do expect this growth quarter over quarter, and we're not currently anticipating specific seasonalization, but more so the growth based on the increased awareness, the number of ATCs that are being onboarded, and the natural timing from when we have the patients being apheresed, and then invoiced, you can see from the numbers that we had in terms of patients invoiced that we had the six in the first quarter and eight already just at the very first weeks of the second quarter. So we will continue to see that incremental growth over time.

Great. So then if I can have a quick follow-up. So for the 24 patients who have been apheres to date, anything you can tell us about the average time between when they were confirmed double positive and when they received apheresis? And is there any potential to sort of expedite this time as the commercial experience grows? Thanks.

Yeah, I can address that. Sure. So it varies a lot, and we have, you know, still a very few number of patients if we think about it. The main driver of the difference between when the patient is identified double positive and the patient is apheres is actually the patient schedule. And many times they need to, you know, get closer to the treatment center. About 40% of our patients today are referrals from other sites that are going to the ATCs, and so that can take some time based on the patient schedule. So it can take, you know, a couple of days to a couple of weeks depending on that situation. Everything that we can do on our side to expedite that, we certainly do. We don't have any constraints from a capacity perspective.

So that is not anything that has been influencing, you know, when the patient can be apheres at this point.

Great. Appreciate the color.

Adrian Rawcliffe (CEO)

Thanks, Paul.

Operator (participant)

The next question comes from Jonathan Chang from SVB Leerink. Please go ahead.

Jonathan Chang (Senior Research Analyst)

Hi guys. Jonathan Chang from Leerink Partners. Thanks for taking my questions. First question, how are you thinking about potential impact from regulatory changes on your business? And second question, what would you say are the key learnings from the early launch to date? What has tracked better in line or worse than your initial expectations? Thank you.

Adrian Rawcliffe (CEO)

So I'm going to ask, I'm going to ask Dennis Williams to comment on the pro-regulatory progress that we see with lete-cel. And then I'm going to ask Cintia to talk about the progress that we've seen since launch and our key learnings from that. Over to you, Dennis.

Dennis Williams (SVP of Late Stage Development)

Yeah, thanks, TECELRAAd. You know, we, like many, right, are constantly watching the, you know, the environment at the FDA, and obviously there's a lot of change going. What I will say, though, is we've had three formal meetings with the FDA in the last six months, and we haven't seen any indication that the FDA is not working as diligently as ever. And I can say for this program, for lete-cel, they're very engaged. So, so far, so good. And with that, I'll turn it over to Cintia.

Cintia Piccina (Chief Commercial Officer)

Thank you, Dennis. And yes, we did learn a lot since we launched the product. I think that the main, I would say, upside, we talked about how fast we have been able to onboard the treatment centers. So that has happened even faster than what we were anticipating. And a lot of it is due to the significant excitement that we're seeing with the sarcoma specialists, how closely they've been working together with the cell therapy specialists in the treatment centers to make sure that we can onboard TECELRA in the sites, and it speaks to the high unmet needs and the innovation that we're bringing with TECELRA. So that has been positively surprising, and, you know, we will be able to complete our full treatment center footprint by the end of the year. The pace from patients getting on board is pretty much as we expected.

We treated our first patients at the end of last year, and now we're seeing the growth align to our original expectations. No denials have been positive. The flow from the biomarker testing is also working well, which is something that was new that we had to launch, and it has been working seamlessly. And I think the other upside has been the manufacturing success rate. We have had 100% success rate that is, as far as I know, unheard of in cellular therapies, and we've been able to achieve a turnaround time, you know, for the patients that we have been treating. So, so far, so good. We're very excited. I think the team has been working really hard to make sure that that can all take place across all the different functions at Adaptimmune and with the medical community as well. So, so far, so good.

Marc Frahm (Biotechnology Equity Research Analyst)

Got it. Thanks for taking my questions.

Adrian Rawcliffe (CEO)

Thanks, Jonathan.

Operator (participant)

The next question comes from Arthur He from H.C. Wainwright. Please go ahead.

Arthur He (VP of Equity Research)

Hey, good morning, Ad and team. Congrats on the progress. So I just had two quick ones. So first, for the, you mentioned in the last quarter that the patient exercise is mostly from the early activated centers. So could you give us more color on current status of that metrics? Yeah, I think you're referring to the, the, just for clarification, you're referring to the fact that most of the patients that we had at that point in time apheres were from the patients from the centers that were started at the beginning of that. Maybe I'll ask, I'll ask Cintia to comment on the, on what we want to say about the current spread.

Cintia Piccina (Chief Commercial Officer)

Yes, thank you, Adrian. So yeah, we had the most number of patients invoiced so far from the ones that were activated earlier, but we have about, you know, patients that have been identified right now in more than 40 patients in more than 40 centers, and, you know, about 80% of the treatment centers have are in the process of at least testing at least one patient. So we are seeing a very good spread across all the treatment centers in terms of patient identification to be tested, then having patients being apheres and eventually turning into invoices. But the spread has been fairly consistent across all the treatment centers.

Arthur He (VP of Equity Research)

Thanks, Cintia. And also for, I just want to follow up on the, between the double positive patient to the patient who get the apheresis, is that still remain like almost nearly 100% for the case?

Cintia Piccina (Chief Commercial Officer)

So we don't have line of sight to all the patients that have been identified as double positives. We do offer sponsored testing, so we have an approximate volume of patients that are going through that route, but we really can't know, you know, about all the patients that are being tracked across all the different sites. What we do know is that from the moment that the patient gets enrolled in our portal and we receive a purchase order, from that moment on, we have not had any cancellations so far, and we have not had any manufacturing failures as well.

Arthur He (VP of Equity Research)

Awesome. Thanks for taking my question. Yeah.

Adrian Rawcliffe (CEO)

Thanks, Arthur.

Operator (participant)

The next question comes from Graig Suvannavejh from Mizuho. Please go ahead.

Graig Suvannavejh (Managing Director)

Yep. Good morning. Thank you for taking my questions, and congratulations on a really nice launch so far. Two questions, if I could. And one is really with regards to perhaps some recent news on the financing front. You chose to pay down 25 million of a financing obligation that you had. It was a bit earlier than we anticipated, and so I was wondering if you could walk us through the thought process there. And then just given my second question that is on where the company is on total liquidity relative to the spend we saw in the first quarter and the revenue, just wondering how we should think about the sustainability of operation and cash rent going forward. Thanks.

Gavin Wood (CFO)

Hi, there. Yes, it's Gavin speaking. Hi, Graig. With regards to, with regards to the pay down of the debt principle, that was actually done in March, and we announced that in our 10K announcement. And that was, the reasons for that was really to continue to manage our balance sheets and leverage and valuation there. It wasn't impactful on our cash runway at that time, and it managed the key stakeholders. So we announced that probably eight, nine weeks ago now and continue to continue to have a good relationship with our debt provider. In terms of the cash position, we had a going concern, a substantial debt that our going concern in the 10K, and that does remain. So clearly less than 12 months cash. We're not going to give detailed cash guidance and cash runway guidance really because it's impacted by a number of factors.

One, of course, is the successful launch of TECELRA we've just been talking to and how that ramps. Second is the cost reduction actions that we took. We announced a restructuring in November that was executed in February. We announced in March further cost reductions associated with our PRAME 8520 programs, and that has impacted on the Q1 spend. So there are costs associated with that restructuring, which makes the Q1 spend higher than a normalized run rate would look like. And finally, we're working through with TD Cowen strategic options. So all of those sort of playing to making giving cash runway guidance inappropriate at the moment.

Graig Suvannavejh (Managing Director)

Thanks. Can I follow up with an additional question?

Operator (participant)

Sure. Sure, Graig.

Graig Suvannavejh (Managing Director)

Thanks so much. Just with respect to the guidance, the revenue guidance for the year, yeah, very impressive that you were able to provide guidance. I don't see many companies in the first year of a launch feeling comfortable enough to be in a position to do so. So my question is, could you just maybe provide some color as to some of the underlying assumptions that give you the comfort to indeed be able to provide that guidance for the year, which was ahead of our estimates. So congrats there.

Adrian Rawcliffe (CEO)

Yeah. No, no. So I think, I think one of the, there's a couple of things. So one of the advantages that I think you have in this cell therapy space is that as we referred to, we can see the funnel of patients coming through from a reasonable perspective. And yeah, so if you think about that guidance, that guidance looks like it's $35 million-$5 million. Now that's roughly, you know, approximately between 50-70 patients treated for the year. And so you think about that in the context of having apheresed 21 patients, seeing an increasing ramp going into coming through Q1 and into Q2. We've also now got experience as to what the net sales price looks like, at least for a relatively small number of patients.

And you put all those and the confidence in the manufacturing, meaning that, you know, so far we've been able to deliver 100% of the patients that we've apheresed, which is, I think, extraordinary, as Cintia pointed out, for a cell therapy launch and a real testament to the manufacturing team here. You put all of that together, and I think you can see that as we go through, you know, the remainder of Q2, which we have good visibility to, into Q3 and Q4 with the increasing ATCs that we've got, we feel quite comfortable about that $35 million-$45 million range.

Graig Suvannavejh (Managing Director)

Okay. Thank you very much, and congratulations again.

Adrian Rawcliffe (CEO)

Thanks, Graig.

Operator (participant)

Again, if you have a question, please press star then one. And our next question comes from Peter Lawson from Barclays. Please go ahead.

Hey, good morning. It's Alex on for Peter. Thanks for taking our questions. Just a clarification on the question on drop-off rate. I guess specifically what percentage of patients end up getting an infusion, you know, relative to patients that get apherese? Is that 100% or?

Adrian Rawcliffe (CEO)

It has been so far.

Okay. Great. And then my other question was just around any manufacturing maintenance work that would be required at some point this year, and if yes, you know, when that could happen?

Yeah. That's a pertinent question given the environment and other companies. John, do you want to talk about our maintenance plans for the year?

John Lunger (Chief Patient Supply Officer)

Yeah, absolutely. So this is John. I lead the manufacturing group, and we don't have plans, and we managed to put a significant shutdown like you maybe seen other places. We do a lot of our maintenance on kind of a rolling way of doing that, and we managed to not impact the capacity when we do that. So for this year, we don't have one of those plans.

Okay. Great. Thank you. And then just one final one, if I may. Any price increases planned in 2025?

Adrian Rawcliffe (CEO)

We've not made any announcements about price increases.

Okay. Great. Thanks for taking our questions.

Thanks, Alex.

Operator (participant)

The next question comes from Yanan Zhu from Wells Fargo Securities. Please go ahead.

Yanan Zhu (Senior Equity Research Analyst)

Oh, great. Thanks for taking our questions. Could you comment on COGS and how it is tracking to your expectation?

Gavin Wood (CFO)

Yeah. Hi there. It's early days, actually, and you know, we're first quarter in, and I think I said beforehand, COGS for the first few quarters are going to be a little bit higher than we think they're going to normalize to because under gap, we're consuming pre-purchased products.

Yanan Zhu (Senior Equity Research Analyst)

Got it.

Adrian Rawcliffe (CEO)

You mean COGS is going to be higher or the margins?

Gavin Wood (CFO)

The margins are going to be higher. Sorry. Yeah. So you'll see lower COGS, higher margins. The margin in Q1 was around about 78%. We think long run average is around about 70%.

Yanan Zhu (Senior Equity Research Analyst)

Got it. Thanks. And could you, now that you're in the market, could you talk about the annual incidence rate for the eligible patient population? Any change compared with when you were planning the launch? Thank you.

Adrian Rawcliffe (CEO)

I'll ask Cintia to comment on her insights. Cintia?

Cintia Piccina (Chief Commercial Officer)

Yes. Thank you, Adrian. So from the pace that we're seeing the patients being onboarded, it is pretty in line to our expectations and to the literature and the information that we have used for our forecasting of about 1,000 patients a year that are being diagnosed with synovial sarcoma. And then, you know, pretty much all of them are going to be going through a round of chemotherapy, potentially surgery, and we can treat all the patients that have been previously exposed to chemotherapy. So, you know, it has been quite in line to what we have planned.

Yanan Zhu (Senior Equity Research Analyst)

Maybe lastly, just about the patient you're treating this quarter and in the near term, do you feel if this, is there any element of warehoused patients, or are these reflecting the, you know, the incidence rate and, you know, up to this point? Thank you.

Cintia Piccina (Chief Commercial Officer)

Yeah. So there is, for the months after launch, a good number of patients that I would call more the prevalent patient population that we're going to be treating for a while. We can see that the pace of the patients being treated depends a little bit on when they're tested. We know that synovial sarcoma is, relatively speaking, in comparison to other hematological malignancies like lymphoma or even ALL, it is a slower progressing condition. And so there is a number of patients that we are seeing now that are part of the prevalent pool, and eventually then I think we're going to reach, you know, we start to treat more of the incident population. I would say that probably by sometime next year that we would see a more, I would say, steady number of new patients getting in every, you know, every month.

But we didn't see really that bollards of patients that were seen in other therapies, but it is natural that we would expect to treat more of the prevalent patients in the first months after the launch, and then it gets to the incident population, but not a dramatic, you know, bubble.

Yanan Zhu (Senior Equity Research Analyst)

Great. Thanks. That's super helpful. Thank you.

Operator (participant)

This concludes our.

Cintia Piccina (Chief Commercial Officer)

You're welcome.

Operator (participant)

Sorry. This concludes our question and answer session. I will turn the conference back over to Adrian Rawcliffe for any closing remarks.

Adrian Rawcliffe (CEO)

Thank you, everybody, for joining us. Thank you for your questions. Great to be able to update you on the fantastic momentum that we're seeing with the launch of TECELRA and the progress with the rest of the sarcoma franchise. I look forward to updating you further in due course. Take care. Bye.

Operator (participant)

This brings to a close today's conference call. You may disconnect your lines.

Cintia Piccina (Chief Commercial Officer)

Yes.

Operator (participant)

Thank you for participating and have a pleasant day.