Gracell Biotechnologies - Q1 2023
May 15, 2023
Transcript
Operator (participant)
Ladies and gentlemen, thank you for standing by. Welcome to the Gracell Biotechnologies' Q1 2023 conference call. At this time, all participants are in a listen-only mode. After opening remarks, we will open the call for your questions. Instructions for queuing up will be given at that time. I would now turn the conference call over to Dr. Kevin Xie, CFO. Please go ahead.
Kevin Xie (CFO)
Good morning, and welcome to Gracell's Q1 2023 corporate update conference call and webcast. With me today are Gracell's Founder and the Chief Executive Officer, Dr. William Cao, and our Chief Medical Officer, Dr. Wendy Li. We're excited to discuss the progress of our differentiated clinical pipeline of CAR T therapies on today's call. We also look forward to sharing with you our recent business development and upcoming objectives as we progress through 2023. We will conduct a question and answer session following our formal remarks. This morning, Gracell issued a press release announcing unaudited financial results for the Q1 ended March 31, 2023. We encourage everyone to read this press release and would like to remind you that this call is being recorded for replay.
Please note that for certain information discussed on the call today, including financial data, clinical data, and the future plans of our program, Gracell's management will be making forward-looking statements. Actual results could differ materially from those stated or implied by those forward-looking statements as a result of various important factors. Please refer to the Risk Factors section of our latest Form 20-F filing with SEC for full disclosure of this risk and factors. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 13, 2023. Gracell undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances at the date of this conference call, except as may be required by applicable securities law. I will now turn the call over to Gracell's CEO, Dr. William Cao. William?
William Cao (Founder, Chairman, and CEO)
Thank you, Kevin, again, welcome everyone to our Q1 2023 corporate update conference call. It has been very productive few months for us. I will begin today's call with key pipeline updates. I'll then turn the call over to our CMO, Dr. Wendy Li, to provide insights into the data presentations from three studies that will be showcased at ASCO and EHA in June. Our CFO, Dr. Kevin Xie, will discuss our Q1 2023 financial results. After our prepared remarks, we'll open the call to questions.
Since 2017, when we began the development of our proprietary FasTCAR next day manufacturing platform and our lead autologous CAR T product candidate, the BCMA/CD19 dual targeting GC012F, we have amassed scientific knowledge, manufacturing expertise, and the clinical data to support our growing conviction in the transformation of this technology and in the therapeutic potential that our product candidate can bring to the CAR T industry. 2023 is shaping up to be a great year as we gather long-term follow-up data from several proof-of-concept studies in two hematological indications, launch our IND trials in the U.S. and China, and also advance GC012F into a new therapeutic category of autoimmune disease. GC012F is currently being evaluated across three hematological malignancies, including relapse refractory multiple myeloma or RRMM in short, newly diagnosed multiple myeloma or NDMM, and relapse refractory B-cell non-Hodgkin's lymphoma or R/R B-NHL.
Starting with RRMM, we are on track to provide updated clinical data from the fully enrolled Multi-center Investigator-Initiated Trial or IIT at both ASCO and EHA this June. We hope this long-term follow-up data can offer further validation to GC012F's differentiated profile, including its unique BCMA/CD19 dual-targeting approach that contributes to deep responses and could potentially help to extend the durability of response. More details will be provided once the ASCO embargo lifts on May 25th. We believe GC012F is a next-generation CAR T therapy candidate that has the potential to push the boundary of autologous CAR T on multiple fronts, such as manufacturing speed, safety, cost, and durability of efficacy. We are focused on the clinical development of GC012F, and are on track to commence our company-sponsored Phase 1b/2 clinical trial in the U.S., evaluating GC012F in RRMM before the end of the Q2 2023.
In addition, we plan to initiate the company's sponsored Phase 1/2 clinical trial in China in the Q3 of 2023. Next week, on May 22nd at 9:00 A.M. Eastern Time, we'll host a key opinion leader webinar with our lead principal investigator, Dr. Saad Usmani, Chief of Myeloma Service at Memorial Sloan Kettering Cancer Center. The webinar will include a discussion of the unmet need and the therapeutic landscape for RRMM. Turning to NDMM, follow-up continue in ongoing IIT evaluating GC012F in a group of newly diagnosed high-risk transplant-eligible multiple myeloma patients. As you may recall, the first clinical data presented in ASH 2022 demonstrated that one single infusion of GC012F achieved a 100% overall response rate and a 100% minimum residual disease negativity in all 16 treated patients across all dose levels.
The preliminary safety profile was outstanding, with 75% of patients not experiencing cytokine release syndrome, and none of the patients had neurotoxicity of any grade. We anticipate sharing updated clinical data in the second half of this year. Related to the ongoing IIT evaluating GC012F in RRBNHL, we look forward to presenting updated data at the 2023 ASCO and EHA 2023, including as an oral presentation at EHA. More details about data set will be made available on May 25th in line with ASCO embargo policy. As unveiled in the press release issued earlier today, we're very excited to announce our strategic decision to pursue clinical development in the immunology field for GC012F. Starting with systemic lupus erythematosus, SLE, we believe FasTCAR GC012F is well-positioned as an ideal product candidate for a wide range of autoimmune disease.
Given the 3 key differentiators, including CD19 BCMA dual targeting capability, consistently favorable safety profile demonstrated across 3 IITs, and our proprietary FasTCAR manufacturing process. This strategic decision is also supported by the robust body of clinical data, as well as the clinical development and the manufacturing experience we have accumulated by studying GC012F in over 50 patients across 3 hematological cancers. SLE is a chronic autoimmune disease in which the autoantibody produced by an immune system attack the patient's own tissues, causing multi-organ damage. SLE affects over 3 million people worldwide. While immunosuppressants are used as a current standard care, SLE remains a chronic condition that is difficult to manage, significantly impacts quality of life, and has no cure. Furthermore, refractory severe SLE could lead to permanent organ damage, resulting in serious morbidity and even death.
As such, there are urgent high unmet medical needs for more effective and even curative therapies, particularly to help manage refractory SLE. Gracell's GC012F represents a novel approach entering human study for refractory SLE, pioneers the use of CD19 BCMA dual-targeting CAR-T in autoimmune disease. By targeting both CD19 BCMA, GC012F could potentially result in deeper, wider depletion of disease-causing B cells and plasma cells, hence enhancing therapeutic outcomes in comparison with CD19 only approaches. GC012F is developed on FasTCAR next-day manufacturing platform, and its technology could offer handful distinct advantages, including shortened patient wait time, reduced cost, as well as enhanced T-cell fitness. As announced, we have commenced an IIT in China to evaluate GC012F in refractory SLE patients. We plan to file IND application for this indication in the U.S. and China in coming quarters.
In addition to meaningful progress related to GC012F, we are concurrently advancing other product candidates in our clinical pipeline. Notably, at EHA 2023, we will present for the first time the clinical data from the Phase 1 portion of the ongoing Phase 1/2 clinical trials in China evaluating GC007g for the treatment of relapsed refractory B-cell acute lymphoblastic leukemia, or BALL. We are currently enrolling patients in the Phase 2 portion. Now, I'll hand the call over to our CMO, Dr. Wendy Li, to highlight the three data sets that will be showcased next month at ASCO and EHA in greater detail. Wendy Li, please go ahead.
Wendy Li (CMO)
Thank you, William. Early next month, at the ASCO and EHA annual meetings, we will present data from 3 studies. The first two data sets hopefully will provide further evidence supporting the differentiated efficacy and the safety profile for our lead bisCAR product candidate, GC012F. The first presentation will be the longer-term follow-up data from the multicenter IIT evaluating GC012F in heavily pretreated RRMM patients. The data will be presented in the oral presentation session at ASCO on June third, and in the poster presentation session at EHA on June ninth. Recall that at last EHA, we shared that GC012F has achieved 100% MRD negative and a 75.9% MRD negative sCR rate in 29 high-risk patients. The responses were still deepening for the newly enrolled patients.
The safety profile was favorable and consistent with previous findings, with mostly low-grade CRS and no neurotoxicity of any grade. Now, with the first patient enrolled more than three and a half years ago, we look forward to providing updated data to further showcase GC012F's strong efficacy and safety profiles. The data is subject to ASCO's embargo at this point, and the full abstract will be posted on the ASCO and EHA websites on May 25th. Second, the updated clinical results from an ongoing IIT evaluating GC012F for the treatment of R/R B-NHL will be highlighted in a poster presentation at ASCO on June 5th, and in an oral presentation at EHA on June 10th. While CD19-directed CAR-T has proven effective for the treatment of NHL, there are opportunities for improvement in terms of the response rate, durability, and the speed of manufacturing.
CD19 and BCMA dual targeting approach is novel for this treatment of NHL and could potentially help address these unmet needs. At last year's EHA, we have shared the initial clinical data from this IIT, demonstrating 100% complete response at month one and three among three patients. We hope to provide an update on additional patients and the longer-term follow-up this June. This abstract is also subject to the May 25th ASCO embargo. Third, the first clinical data for GC007g, a CD19-targeted donor-derived allogeneic CAR T-cell therapy from a Phase 1 trial in patients with RRBALL who relapsed after an allogeneic human stem cell transplant, will be showcased in a poster presentation at EHA on June 9th. As per the abstract posted to EHA's website on May 11th, the data demonstrated encouraging persistence of allogeneic CAR T-cells, durable remission, and a favorable safety profile.
Between March 2021 and May 2022, 9 RRBALL patients were enrolled and treated in the Phase 1 portion of the registrational Phase 1 and 2 clinical trial in China, evaluating GC007g at 2 different dose levels. All patients had relapsed BALL following a partially or fully matched prior human stem cell transplant. At day 28 after infusion, 100% patients achieved MRD negative complete remission with or without incomplete count recovery. At the median follow-up of 445 days, ranged from 218 to 600 for 49 days. Seven of nine patients remain in CR or CRI, while 2 patients had CD19 negative relapse. The one-year progression-free survival PFS and OS were 76.2% and 85.7% respectively. CRS is presented as Grade one to Grade three events only and all resolved after treatment. No ICANS was observed.
I will now hand the call over to our CFO, Dr. Kevin Xie. Kevin?
Kevin Xie (CFO)
Thank you, Wendy. Turning to our financial results for the Q4 ending March 31st, 2023, I'd like to touch on a few financial trends. As of March 31st, 2023, the company had RMB 1,277.3 million, or $186 million, in cash and the cash equivalents and short-term investments. We expect the cash use for this year to be approximately $100 million, primarily to fund our R&D and the clinical programs in the U.S. and China. We expect our current cash position to be sufficient to cover our operating plan and R&D activities through the end of 2024.
Net loss attributable to ordinary shareholders for the three months ended March 31, 2023, was RMB 151.7 million, or $22.1 million, compared to RMB 158.6 million for the corresponding prior year period. Research and the development expenses for the three months ended March 31, 2023, were RMB 137.5 million, or $20 million, compared to RMB 121.8 million in the corresponding prior year period. The increase was primarily due to increased spending on research, development, and the clinical trials, including licensing expenses with Seagen. With that, I'd like to turn it back to the operator to open the session for your questions. Operator?
Operator (participant)
The floor is now open for your questions. To ask a question this time, please press star one on your telephone keypad. If at any point you'd like to withdraw from the queue, please press star one again. We'll now take a moment to compile our roster. Our first question comes from the line of Yigal Nochomovitz from Citigroup. Your line is open. Please go ahead.
Yigal Nochomovitz (Director and SMid Cap Biotech Analyst)
Yeah. Hi, thank you for taking the questions. With respect to the decision to pursue SLE for GC012F, can you talk a little bit more about what other autoimmune diseases you are considering, potentially for future development? How did you decide on SLE as the first opportunity? Could you talk about when we would see the initial data from the China IIT for SLE? Thank you.
William Cao (Founder, Chairman, and CEO)
Okay, thank you for the question. This is William Cao. SLE is probably one of the largest indication in autoimmune arena. More importantly, there is a Nature Medicine paper, as everybody knows now, that the CD19 CAR T successfully treated 6 patients, 6 SLE patients. These are proven concept initial data. We're still trying to pursue other autoimmune indications as well. At this moment, all I can say is, and this is the plan, with SLE, as fast as we can. The mechanism of action will have a incoming event. We'll disclose why we think the dual targeting is better fit for this SLE indication or other immune disease. Simply just high level, you know, it's dual targeting.
The CD19 is targeting B-cell that we all know, and BCMA targeting plasma cell, that is also a major part of autoantibody producing cells. Okay? I hope I, at a high level, answer your questions.
Yigal Nochomovitz (Director and SMid Cap Biotech Analyst)
Yeah, thank you. Then just with regards to the Phase 1B/2 that you're starting in the U.S., can you talk a little bit about more the recruitment strategies for that trial? Obviously, that is a very competitive space in terms of identifying and recruiting patients for the relapsed/refractory multiple myeloma setting, given some of the newer therapies, specifically the bispecifics. Also, when you think about the U.S. trial for the Phase 1/2, is it basically the same design as what's going to happen in China? Or are there some differences in terms of the way you're going to recruit the trial in China or design differences? Thanks.
William Cao (Founder, Chairman, and CEO)
I think this question is for Wendy. Yeah, please.
Wendy Li (CMO)
Okay. Yeah. We're on track to initiate the U.S. MD trial in this quarter, and then the next quarter in China. The currently study site has been activated in the U.S. Our study will be conducted in the top medical center, and they're well experienced in cell therapy study. We're very excited to work with the PIs.
Yigal Nochomovitz (Director and SMid Cap Biotech Analyst)
Okay, thanks.
Last question, Oh, sorry.
William Cao (Founder, Chairman, and CEO)
Okay.
Yigal Nochomovitz (Director and SMid Cap Biotech Analyst)
Yeah. Just one other question with regard to, the decision between GC007g and GC502. Can you just comment there? It seems like you're moving forward with GC007g instead of GC502, but if you could just clarify. Thank you.
William Cao (Founder, Chairman, and CEO)
Wendy, do you want me to take that one?
Wendy Li (CMO)
Yes, please.
William Cao (Founder, Chairman, and CEO)
Okay. GC007g has been in IND trial for a while, so it was much earlier than the GC502. We haven't even filed our GC502 IND application yet. That, you know, just due to logistics. For TruUCAR, which include the GC502, are still developing in early stage of development. We have gathered a lot of clinical evidence for the gene modifications, and hopefully, this year we'll have something to share with. Yeah, GC007g now is in Phase 2.
Yigal Nochomovitz (Director and SMid Cap Biotech Analyst)
Okay. Thank you very much.
William Cao (Founder, Chairman, and CEO)
You're welcome.
Operator (participant)
Our next question comes from the line of Emily Bodnar from H.C. Wainwright. Please go ahead.
Emily Bodnar (VP and Senior Healthcare Analyst)
Hi. Good morning, and thanks for taking the questions. Are there any other Phase 1 plus 2 studies that you might plan to initiate in the U.S. this year, next year? I know you just mentioned the SLE study, so maybe if you could give a bit more of a timeline on that. Also, can you discuss your strategy for newly diagnosed multiple myeloma? Is that an indication that you think you would move forward in the U.S. eventually? How do you kind of think about use of a CAR T in that setting? Thank you.
William Cao (Founder, Chairman, and CEO)
Wendy, me or you?
Wendy Li (CMO)
I think that's the 2 questions regarding the U.S. trials. Right. Currently we have the GC012F RRMM trial is going to be conducted in U.S. as a Phase 1B and a 2. More studies will be considered and in plan. Your question is this year, next year. Right. In the plan. The NDMM, actually we have the presentation last year, ASH. That was so much examined around our presentation last year at ASH and yes, the conducted studies in U.S. were in plan.
Operator (participant)
Our next question comes from the line of Joseph Catanzaro from Piper Sandler. Please go ahead.
Joseph Catanzaro (Managing Director and Senior Research Analyst)
Hey, guys. Thanks so much for taking my questions. Maybe just two quick ones from me. First, I just want to see if you had any thoughts on the top line CARTITUDE-4 data for Carvykti, what it means for the space and maybe more importantly, how you think about the development strategy for GC012F in light of these data? With regards to SLE, just wondering if there's any dosing work that needs to be done there or can the dose levels that you've been using, in the setting of oncology translate directly into the autoimmune setting? Thanks.
William Cao (Founder, Chairman, and CEO)
Let me take, Wendy. All right. The data we presented at ASH provides a good proof of concept for the 12F. It's a, you know, I don't think it's easy for us to compare head-to-head comparison with Carvykti on the different lines. As we will be updating the new follow-up data, longer follow-up data at the ASCO for RRMM, we are very pleased to see a very competitive efficacy and again, you know, safety and other features. Regarding the SLE dosing, it's too early, Joe, to talk about it. I think it's, yeah, it's too early. We could decide, we need to gather more information, obviously through the IIT study verification, and then the reference others.
I don't think we'll be very far on the dose for oncology.
Joseph Catanzaro (Managing Director and Senior Research Analyst)
Okay, great. Thanks so much for taking my questions.
William Cao (Founder, Chairman, and CEO)
You're welcome.
Operator (participant)
Our next question comes from the line of Kelly Shi from Jefferies. Please go ahead.
Speaker 9
Hi, everyone. Thanks for taking my question. This is Dave, and for Kelly Shi. I have a couple of questions. First one is on GC012F. Now you have initiated the manufacturing setup in U.S. Just wondering, is there a scope to increase the manufacturing capacity, or it's just that manufacture that you will be doing at the CMO? The next question is on GC007g. Can you highlight a little bit about the treatment landscape in China and what is the market opportunity and whether it'll be for adult ALL or pediatric ALL? Thank you.
Wendy Li (CMO)
The first question.
William Cao (Founder, Chairman, and CEO)
Well-
Wendy Li (CMO)
Sorry.
William Cao (Founder, Chairman, and CEO)
Yeah, please.
Wendy Li (CMO)
Yeah. The first question says, Lonza is our US CDMO. Right now it is supplying for our US clinical trial currently. The second question for GC007g is one type of the allogeneic CAR T that derive from the HLA matched donors for BALL patient that relapsed from allogeneic stem cell transplant. They usually have HLA matched donor, readily available. Some of these patients are not suitable for autologous CAR T therapy due to the cell quality or other issues. Yeah, using T-cell donated by HLA matched donor is one strategy to help this site of the patient to get access to CAR T while also addressing the GHD risk for allogeneic CAR T.
This EHA will be the first time we disclose the first line clinical data for GC007g. We have observed encouraging persistence of allogeneic CAR T cells, durable remission and favorable safety profile. The Phase 1 include nine BALL patients that relapse following partially or fully matched prior human stem cell transplant. At day 28 after infusion, one of the patients achieves MRD negative CR and CRI at a medium follow-up of 445 days. Seven of nine patients remain in CR or CRI, while two patients had CD19 negative relapse. The one-year PFS and OS were 76.2% and 85.7% respectively. The CRS is presented at a grade one to grade two events only and all resolved after treatment. No ICANS was observed.
Right now the Phase 2 is ongoing.
Speaker 9
Thank you.
Operator (participant)
Our final question comes from the line of Louise Chen from Cantor Fitzgerald. Please go ahead.
Wayne Wu (Research Analyst)
Hi, team. This is Wayne Wu for Louise. Congrats on a progressive quarter, and thanks for taking our questions. Our first one is on SLE. What is the current standard of care, and what is the efficacy for that? What data from the GC012F you have seen so far that gives you the confidence it could be a potential treatment option? From a modeling perspective, with a lot of initiations to commence this year, how should we think about the operating expense for the year? Thank you.
Wendy Li (CMO)
That first?
William Cao (Founder, Chairman, and CEO)
Hello.
Wendy Li (CMO)
Maybe you can do it, William.
William Cao (Founder, Chairman, and CEO)
All right. Okay, regarding all the details of the evidence of a dual targeting for SLE, mechanism of actions, I think we'll find a appropriate event to present our evidence. At this moment, I think the the good evidence coming from not just preclinical studies published by other groups, but primarily from this Nature Medicine paper that the CD19 CAR T is very effective against SLE or CD19 autoimmune disease, potentially. That's all I could comment. Well, we do have a foundation that based decision for getting into this field. It's a good question regarding resources. How do we handle multiple project in the coming years?
First of all, we reprioritized some of our early programs and this SLE filing and Phase 1 studies is not going to be a major, costly programs. I think we are in good shape to manage that.
Wayne Wu (Research Analyst)
Got it. Thank you very much, William.
William Cao (Founder, Chairman, and CEO)
You're welcome.
Operator (participant)
Okay. It does appear we do have one more question from the line of Yanan Zhu from Wells Fargo. Please go ahead.
Yanan Zhu (Senior Analyst of Biotechnology Equity Research)
Hi, thanks for fitting me in. I have a couple questions on the lupus program. Do we know the relative contribution of plasma cells and B cells to the autoimmunity? It does appear from the Nature paper that targeting B cells alone might have already had a good efficacy. Just wondering the incremental benefit from targeting BCMA. Also a question on the acceptance of lymphodepletion in lupus as well as in additional broader autoimmune diseases. How do you know, look at that requirement and what it means for uptake in those diseases? Thank you.
William Cao (Founder, Chairman, and CEO)
Yeah. Yanan, these are good questions. I think it's similar to part of the question, similar to the previous questions, you know, MOA of the GC012F or OE for other autoimmune disease. Maybe I could sort of extend a little bit by referencing one of the publications by UPenn's group that in subgroup of autoantibody-producing cells, expression of BCMA is high. However, CD19 is low, and these are very long-lasting antibody, autoantibody-producing cells. The paper discussed that there will be certain patients remain refractory to CD19 targeting because of expression of CD19 that's diminished when the cell develop into plasma cell stage. We all know plasma cell is the major antibody-producing cells.
We do have preliminary data to support the direction, but we will discuss about in appropriate event. Did I answer all your questions, Yanan?
Yanan Zhu (Senior Analyst of Biotechnology Equity Research)
Thanks, William. The role of lymphodepletion in autoimmune diseases or how it might affect, uptake.
William Cao (Founder, Chairman, and CEO)
Low lymphodepletion.
Yanan Zhu (Senior Analyst of Biotechnology Equity Research)
Sorry.
lymphodepletion. Sorry.
William Cao (Founder, Chairman, and CEO)
Yeah, lymphodepletion in... What do you mean? Lymphodepletion in autoimmune disease is lower or? I think I missed that.
Yanan Zhu (Senior Analyst of Biotechnology Equity Research)
Sorry, I meant to say, for CAR T to be used to treat autoimmune disease.
Lymphodepletion is required. I was just wondering how that might fit in a autoimmune disease, treatment, situation, especially how patients-
would, you know, be willing to-
William Cao (Founder, Chairman, and CEO)
I see.
Yanan Zhu (Senior Analyst of Biotechnology Equity Research)
undergo treatment.
William Cao (Founder, Chairman, and CEO)
Right. It is not an issue, as being, you know, sort of evidenced by this Nature Medicine group and then also the clinical studies that we intend to conduct, as an IIT in China as they're being all approved. It's not a concern. Lymphodepletion for these autoimmune disease patients is tolerable, and those chemicals are used or was used for autoimmune disease treatment, so they are safe. Patient acceptance, I'm not aware of that could've been an issue. I don't think so. It's a debilitating disease, so lymphodepletion, it's relatively lighter treatment.
Yanan Zhu (Senior Analyst of Biotechnology Equity Research)
Very helpful. Thank you, William.
William Cao (Founder, Chairman, and CEO)
Okay. You're welcome.
Operator (participant)
I will now turn the conference over to Dr. William Cao.
William Cao (Founder, Chairman, and CEO)
Thank you again to everyone for joining us on the call. We are proud of the progress the Gracell team has made over the past year. 2023 will be exciting year for us, as we are on track to initiate our RRMM IND studies in both the U.S. and China and expanding GC012F into the autoimmune field. We believe Gracell is well-positioned to deliver CAR T-cell therapies that can potentially transform the treatment landscape. We look forward to providing clinical data updates and sharing key pipeline and technology updates throughout the year.
Operator (participant)
Ladies and gentlemen, this concludes today's presentation. Thank you once again for your participation. You may now disconnect.