Precigen - Earnings Call - Q4 2024

Transcript

Operator (participant)

Morning, and welcome to Precigen's full-year 2024 financial results and business update call. At this time, all lines are in listen-only mode. Following the prepared remarks, there will be a question-and-answer session. Please note that this event is being recorded. I would now like to turn the conference over to Steve Harasym from Investor Relations. Please go ahead.

Steve Harasym (Head of Investor Relations)

Thank you, Helen, and thank you for everyone joining us this afternoon. With me today are Dr. Helen Sabzevari, President and CEO of Precigen; Harry Thomasian, our CFO; Phil Tennant, our Chief Commercial Officer; and Rutul Shah, our Chief Operating Officer. Before we begin, let me briefly review our forward-looking statements. During today's call, we will make various forward-looking statements. Investors are cautioned that our forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results or outcomes to differ from those indicated by our forward-looking statements. Please read the safe harbor statement contained in our most recent SEC filings, as well as risk factors contained in Precigen's filings. With that, I would like to now turn the call over to Dr. Sabzevari. Helen.

Helen Sabzevari (President and CEO)

Thank you, Steve, and thank you to all for taking the time to join us for our year-end 2024 update. It is indeed a transformative time for Precigen, and as we are on the verge of commercializing our lead asset, PRGN-2012, in RRP, potentially bringing a treatment to this patient population with a high unmet need. From discovery in 2020, phase I initiation in 2021, phase II with breakthrough designation and accelerated approval pathway in 2023, followed by publication in Science Translation and presentation of the groundbreaking data at ASCO in 2024, this program has advanced with remarkable efficiency and agility. We finished 2024 with submission of our BLA and announced FDA's acceptance with priority review with an upcoming PDUFA date of August 27, 2025. The FDA has indicated that they are not currently planning to hold an advisory committee meeting to discuss the BLA.

I would like to now take some time, a few minutes, to recap our data, which actually recently has come out in Lancet publication. We are extremely excited about PRGN-2012's potential in RRP to not only be the first but the best in the class treatment due to significant effect in terms of efficacy, safety, ease of route of administration. In our pivotal clinical data, PRGN-2012 demonstrated a statistically significant efficacy. I want to emphasize that our clinical study was designed with a robust, clinically meaningful, and most importantly, a prospectively defined statistical primary efficacy endpoint of complete responses in RRP patients. Our pivotal study met primary efficacy endpoint with 51% complete response rate. That was statistically significant and handily beat pre-specified success criteria established in alignment with FDA.

Complete responses have been durable, with median durability of response at 24 months, and all of our phase I complete responders remained surgery-free and in complete response three years. This is highly significant, and I'm going to stress that the data that was presented at ASCO, showing collectively phase I and phase II, it has such a close repeat that in our phase I, we had 50% complete responders and phase II, 52%, for the average of 51% complete response in a prospective manner. Furthermore, 86% of all of our patients had reduction in the number of surgeries. In multiple publications, we have also shown significant enhancement of HPV 6 and/or 11 T-cell responses, which directly corresponds to the mechanism of action of PRGN-2012 and our clinical responses. The first set of data was published actually in 2023 in Science Translation in regard to this.

Also, we have shown that PRGN-2012, again, because of the differentiation that the gorilla adenovirus has shown, it can be repeatedly dosed, not only in our current program of PRGN-2012, which there have been four doses, but also in our other programs, such as PRGN-2009, which has been dosed more than 20 times. This platform is different than other AAVs or other viral platforms that they have a limited amount of time that you can dose them, for instance, once and twice. Gorilla adenovirus, it can be repeat dosed and continues to lead to the enhancement of the T-cells in the absence of neutralizing antibodies, significant neutralizing antibodies. Finally, I would like to say that the PRGN-2012, based on all the data that has been shown and the follow-up, is extremely well tolerated with no dose-limiting toxicity, no treatment-related adverse event greater than grade 2.

As we have already shown, the route of the administration is just a simple sub-Q administration that can be given at any office. We also have continued with our readiness to hit the ground running post PDUFA date in August of 2025, as we shift from R&D to commercialization, and Phil, our Chief of Commercial , would be speaking to that. Finally, I would say a few words about our confirmatory trial, which already has been initiated and has started enrolling patients. Our confirmatory trial, in alignment with the FDA, is a single-arm, no placebo control required, with 35 patients to be enrolled, and we are well on our way. Not only have we started and are enrolling patients, but we are moving very rapidly in finishing this trial.

With that, I will now turn the call to Rutul Shah, our Chief Operating Officer, who will be speaking to our GMP and manufacturing readiness. Rutul?

Rutul Shah (COO)

Thank you, Helen. I would like to take a few moments to discuss our manufacturing strategy and provide an update. As you are aware, we have made significant commitment and investment to be in control of our GMP manufacturing activities. With that strategic goal in mind, we had built an in-house dedicated GMP facility for our adenovirus drug substance manufacturing back in 2019. We had manufactured all PRGN-2012 drug substance lots utilized in our clinical trials at this facility. Now, we have upgraded the facility, and with a strong leadership and operations team, we are ready to support the commercial launch of PRGN-2012. In addition, we utilize an established commercial CDMO for Phil Tennant's operations for the PRGN-2012 drug product. We have also built significant GMP quality control capabilities in-house to support release testing of PRGN-2012.

Together, our GMP manufacturing and testing strategy is designed to give us better control over most specialized operations, overall timelines, and provide independence from external vendors as much as practical while containing costs. As part of the PRGN-2012 BLA, we had completed the process validations as previously aligned with the FDA. We are confident in our ability to supply PRGN-2012 products to meet anticipated demand at launch and beyond. With that, I'd like to now hand over to Phil Tennant, our Chief Commercial Officer, to provide an update on PRGN-2012 market opportunity and our commercialization strategy. Phil?

Phil Tennant (Chief Commercial Officer)

Great. Thank you, Rutul. Good afternoon, everyone. The past few months have been incredibly dynamic for our commercialization team as we advance preparations for the commercial launch around the August 27 PDUFA. As Helen said, this is a pivotal milestone for us as an organization, and I'm excited to share the progress that we've made since our last update. We have made some significant strides in our launch readiness, including several major accomplishments. Firstly, we've completed the build-out of our Precigen commercial leadership team. We have a very strong and experienced team now across sales, marketing, medical affairs, and market access and distribution who have the experience and the capabilities to guide the launch with precision and impact. Secondly, we've established a comprehensive commercialization strategy for the U.S. launch, and this spans all facets of our operations to ensure we hit the ground running at launch.

In terms of our broader commercial infrastructure, we're delighted to announce our partnership with EVERSANA to implement the U.S. launch. As a proven leader in supporting rare disease launches, EVERSANA brings a wealth of experience that complements our vision for PRGN-2012. Together, we are executing on critical launch activities across the spectrum, including the training and deployment of dedicated field teams to ensure a seamless and impactful launch. Our updated analytics underscore the importance of this work. Our advanced analysis, as shared at JPMorgan, suggests that up to 27,000 adult patients in the U.S. are living with RRP, which is higher than the previous estimates of up to 20,000 and indicative of an even greater unmet need. These data strengthen our resolve to launch PRGN-2012 with a patient-centric focus, ensuring timely access to this transformative treatment.

In summary, we're moving decisively towards launch, driven by an experienced leadership team, a highly capable commercialization partner, and a robust strategy. These elements position us well to realize the full potential of PRGN-2012, with commercial revenues expected to begin in the second half of 2025. We are primed to hit the ground running given our PDUFA dates, and that would clearly position us as the first and only medical treatment available for these patients. Back to you, Helen.

Helen Sabzevari (President and CEO)

Thank you, Phil. As you can see, the level of excitement among Precigen and our teams has, obviously, PRGN-2012 has been our highest priority and remains to be our highest priority as we take and transform the organization from R&D to the commercial organization. With that in mind, however, I would like to also give you an update on two other programs that have been very exciting and very important. The first one is our PRGN-2009, which is our gorilla adenovirus drug product that targets HPV 16 and 18, which is the lead cause of HPV-related cancers. A total of 5% of all cancers are HPV-related, and that includes cervical cancers, head and neck, and anal cancer as indications. Our PRGN-2009 has been targeting HPV 16 and 18, and we presented the data, the Phase I data at ASCO in 2023.

We showed not only a very favorable safety and tolerability profile, but more importantly, in a relapse refractory patient that they had failed even all the checkpoint inhibitors. We were able to show, for the first time for any drug product in these settings, 30% objective responses. Complete responders, as well as partial responders. We had our complete responders spanning close to two years of response. In these same patients, we have shown, and some of them have received excess of 20 doses of PRGN-2009, which has the exact same backbone as PRGN-2012, and have shown not only the neutralizing antibodies are at bay and not increasing at all, but also clear enhancement of T-cell responses upon re-dosing of these patients. This clinical data in conjunction with our immunological data points again to the differentiation of our gorilla adenovirus platform than any other platform.

Currently, our PRGN-2009 is advancing at phase II, both for cervical cancer and head and neck at NCI, and we continue to expand on that, and we will be looking forward in the near future to be giving updates on these two programs. At the same time, I'd like to give you an update on our UltraCAR-T platform. As you are aware, our UltraCAR-T platform, to our knowledge, is genuinely the only CAR-T platform that can deliver autologous CAR-T of the patient overnight at the setting of the hospital without a centralized manufacturing. It's decentralized manufacturing. It's overnight, and it's autologous. It contains the CAR of the interest, plus a safety switch, which becomes very important if anything goes wrong.

You can eliminate these cells immediately at the same token with the mechanism of membrane-bound IL-15, which allows actually the persistence and expansion of these cells in a way, the manufacturing of these cells directly in vivo in patients, and you do not need in vitro expansion of these cells. Last year, we communicated that we had finished our Phase I-B in AML patients, and we also communicated that we are preparing for the presentation for the end of Phase I-B to FDA. Meanwhile, at JPMorgan, we presented further data and quite exciting data that, in our belief, it's the first time ever that any company has shown this. For the first time, we have developed and discovered a specific biomarker for AML patients in our responders versus non-responders after the treatment with the CAR-T.

We have shown part of that data at JPMorgan, and I highly encourage people to take a look at that presentation if they have not seen that. We are currently very much excited about putting this material together, and we are preparing for our meeting with the FDA to discuss not only the platform, but also our AML data, and also to discuss the strategy for a pivotal phase II and a path for approval, starting with the AML. Please stay tuned. We will be giving you updates on that level as well. Finally, I would like to also mention that our UltraCAR-T platform has been generating very exciting data in an autoimmune setting.

As you know, the requirements for autoimmune settings are you have to have a safe CAR that you can actually generate with the price tag that can be used in a number of dosing. Our CAR-T platform meets all of that, including with safety switches and also the next generation adjustments that it does not require any use of checkpoint inhibitors in them. With that data, we believe that in the field of autoimmunity, not only do we have the ability to be first in the class, but also the best in the class. This is ongoing, and we are very excited about this. With that update, I would like now to hand over to our CFO, Harry. Harry?

Harry Thomasian (CFO)

Thanks very much, Helen. Welcome to those participating in the call today. This really is an exciting time at Precigen as we prepare for the launch of our first commercial drug product. You have already heard from other members of the Precigen team as to our preparedness toward this goal, and I would like to spend some time discussing our financial position as we move towards commercialization. I will begin by highlighting our financial results for 2024. Overall, we finished the 2024 year with a net loss of $126.2 million, $0.47 for basic and diluted share, compared to a net loss of $95.9 million, or $0.39 for basic and diluted share, and the year ended December 31, 2023. I would like to point out that our current year net loss included over $55 million of non-cash charges, net.

Our cash burn for 2024, consisting of cash used in operations plus capital expenditures, totaled $76.8 million. Our press release and management discussion and analysis included in our 10-K, both of which we just filed with the SEC, provide further detail as to fluctuations in our statement of operations between 2024 and 2023. With that summary of our operating results, I'd like to spend a little time focused on our financial position. As I believe most of you listening in are aware, we raised $79 million at the end of 2024 via a preferred stock issuance, which included the issuance of warrants to purchase common stock. We believe that the terms of this preferred share instrument are friendly to the company. The preferred stock carries an 8% dividend, of which the first two years are to be paid in kind.

Beginning with the third year, while dividends will be payable in cash, the payment of such are due when and if declared by Precigen's board of directors. While the preferred shares are convertible into common stock, the conversion feature resets each quarter, thus reducing the dilutive effect of a potential conversion as our stock price increases. In addition, the company has the ability to redeem the preferred shares for the stated value plus accumulated and unpaid dividends, while the holders do not have the ability to put the shares to the company. You can find more detailed summary of the terms of the preferred stock issuance in the financial statements in our Form 10-K, just filed with the SEC, or within our 8-K announcing the transaction that was filed with the SEC on December 30th of 2024.

On top of the funds received from the preferred stock issuance, we also monetized, in a non-dilutive manner, certain intellectual property rights and royalty rights related to non-core assets of the company in December 2024, which resulted in proceeds of $8.5 million. The preferred issuance, plus the aforementioned sale of intellectual property rights and royalty rights, helped shore up our balance sheet, and we finished the year with cash, cash equivalents, and investments of $97.9 million. We're confident that this balance will support us well beyond our anticipated launch date and well into 2026. This runway is based on current projections, which includes anticipated revenue from the commercialization of PRGN-2012. As Helen mentioned earlier, our BLA was accepted by the FDA in February under a priority review with a PDUFA target action date set for August 27th of 2025.

This target action date, plus the preparedness of our commercial team, as you heard from Phil earlier, provides me with a level of comfort to include revenue in my projections. Although from an accounting perspective, this anticipated revenue is considered outside of our direct control as that revenue is dependent upon the successful FDA approval of the PRGN-2012 BLA. In closing, I want to reiterate that Precigen has always shown a strong financial discipline, and we will continue to do so in the future. Our focus has and always will be to utilize our resources to garner the highest value for our shareholders. With that, I'd like to open up the call for Q&A and turn it over to Helen, the operator.

Operator (participant)

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star two. If you are using a speakerphone, please lift the handset before pressing any keys. Please limit your question to one and one follow-up. Then you can go back to the queue. One moment, please, for your first question. Your first question comes from Jason Butler of Citizens. Your line is already open.

Jason Butler (Managing Director)

Hi, thanks for taking the questions and congrats on the progress. Two for me. One, just at a high level, can you give us an update on the interactions with FDA and how would you characterize the ongoing review for 2012? From a commercial side, can you speak to what your current thoughts are on the size of the field force and the number of sensors that you'll be targeting during the initial launch? Thank you.

Helen Sabzevari (President and CEO)

Hi, Jason. Thank you for the question. In regards to our BLA submission and actually receiving a priority review, we have been having, as we have mentioned throughout our submissions as well as even before that, very, very close interaction and alignment with the FDA. We are very thankful to the FDA for a close interaction and the guidance as I continue to do so. I think we are in a very good position in our submissions of the BLA and discussions, and we continue to do so, as you can imagine, throughout the review cycle. Currently, of course, we stay very close in alignment with the FDA. In regards to the commercial, I think maybe Phil can address this already.

Phil Tennant (Chief Commercial Officer)

Yeah, sure. There were a couple of parts to that. Regarding the size of the field force, we've been fairly consistent in our thinking that we believe it's somewhere in the range of 15-20 representatives in the field, and that hasn't changed in terms of what we're thinking. A fairly modest sales team. We believe there are around 500 fellowship-trained otolaryngologists out there who will be responsible for treating the bulk of the patients, and those will largely be concentrated in the urban academic centers and the large IDNs, and that will be an important part of our targeting.

Jason Butler (Managing Director)

Great. Thank you very much.

Operator (participant)

Your next question comes from Ben Burnett of Stifel. Your line is already open.

Carolina Ibanez-Ventoso (Research Associate VP)

Hello. Good afternoon. This is Carolina Ibanez-Ventoso, on for Ben Burnett. Thank you for taking our questions, and congratulations for all the progress. Do you have any line of sight at this point on the timing of any additional meetings with the FDA, pre-licensing inspections, and labeling discussions during the review process? I have a follow-up as well.

Helen Sabzevari (President and CEO)

Hi, Carolin, and thank you for the question. Of course, as part of the regulatory process, there are inspections for facilities. Because of that, we will not be making any comment, but this is typical, especially for GMP facilities, as I mentioned. We have been always in very close alignment and continue to be with the FDA, and we look forward to further communication as, obviously, we get closer to our PDUFA date.

Carolina Ibanez-Ventoso (Research Associate VP)

Okay. Thank you. If PRGN-2012 gets approved, do you anticipate there will be a bolus of patients, and how do you plan to position yourselves to address it?

Phil Tennant (Chief Commercial Officer)

Yeah, great question. I mean, we absolutely do think there's pent-up demand here. These patients have had no other options, really, on label at all. It's only surgery and some off-label treatments which don't address the underlying infection. Absolutely, we believe that there will be a concentration of patients who are in desperate need of this type of medication when we get to market. We will be deploying our team and our efforts accordingly to make sure that as many of those patients appropriately get our treatment as soon as possible.

Carolina Ibanez-Ventoso (Research Associate VP)

Okay. Thank you very much.

Helen Sabzevari (President and CEO)

Thank you, Carolin.

Operator (participant)

Your next question comes from Swayampakula Ramakanth of H.C. Wainwright. Your line is already open.

Swayampakula Ramakanth (Managing Director)

Thank you. This is RK from H.C. Wainwright. Good afternoon, Helen, Phil, Rutul, and Steven. In terms of the indication itself, Phil, you are saying that based on your looking at the claims, the number seems to be higher and in the order of 27,000 in the United States and probably around 125,000 outside the U.S. That is with no therapy, no approved therapy, as you said, and only patients who are brave enough to go under the knife. With an approved drug, two things. How easy is it for patients to get diagnosed that they do have RRP? Number two, how are you thinking of trying to get those patients or approach those patients who have not yet been diagnosed? Is there a mechanism by which you can actually get these patients diagnosed correctly?

Phil Tennant (Chief Commercial Officer)

Yeah. Great. Great. Let me take the first part. Okay. The patients are very visible. They're having surgeries. Many of them have frequent surgeries on an annual basis. We believe a lot of those patients are going to be readily identifiable at launch. Obviously, that's a key area for us to focus on. Like all good launches, we will have personal and non-personal promotion. We will have remote promotion available. Where we can't reach everyone with a face-to-face interaction, we will be able to provide information and direct people to the appropriate information for their patients. The focus is definitely on those who are already visible because we think that will be the bulk of the patients actually that are out there at the moment.

The other phenomenon I would say that we have seen in other rare diseases is when you start to get a new treatment in a rare disease area, the amount of diagnosed patients or presenting patients actually increases because of the enhanced awareness, understanding, and education out there. We've seen that in a number of other rare diseases, and we don't think this will be any different.

Helen Sabzevari (President and CEO)

Okay. Maybe RK, this is Helen. I can also add to what Phil mentioned. In regard to the patients, obviously, identifications, currently, the adult patients that they have and they live with the RRP, this is a patient population that is at the target. These patients are highly themselves involved in regard to finding a new innovative treatment because, as you know, for almost the past 50 years, this disease has been around, and unfortunately, there has been no treatment for this disease except the continuous surgery, which is just a Band-Aid in a sense. From that perspective, not only the patients themselves, but also we have been obviously through a whole educational system with our patient group that, for instance, we had last year the RRP Day and for patient awareness and RRP awareness.

These basically campaigns will continue as we go through our PDUFA and beyond to ensure that not only all the patients are aware of the innovative treatments, but also that our investigators, laryngologists, and the KOLs, they are fully familiar with the various aspects of hopefully the new soon-to-be a standard of treatment upon, obviously, FDA approval for RRP, which is we are thrilled to have played a part when this hopefully becomes approved for these patients in this century.

Swayampakula Ramakanth (Managing Director)

Perfect. Thanks for all that colored in. Let me try another two-part question. As for the confirmatory trial for the PRGN-2012, what's the current status? Do you think you will be close to completion by the time you get to the PDUFA date? The second part, or the second question actually, is on the PRGN-3006, should we expect any of that data from the Phase I study to be published either in the first half or later in the year?

Helen Sabzevari (President and CEO)

Great. Great. Great questions. In regards to the confirmatory for PRGN-2012, as mentioned, part of the BLA submission is that you have initiated the trial already, and we did that last year, actually, well ahead of the submission of the BLA. Currently, the patients, not only they are being enrolled, the finishing date for the confirmatory trial, as you know, are endpoints. The confirmatory trial design, which, again, we are in full alignment and very close agreement with the FDA, FDA has given us the exact same design as we had for our PDUFA, which was basically a single-arm trial, 35 patients, no placebo requirement as a second basically arm, and it's complete responses, which takes 12 months, minimum of 12 months. As I mentioned, we currently have been following, of course, our patients in a prospective manner well over 12 months, and the median is at 24 months.

Our Phase I patients, which are the oldest patients that have been obviously dosed, they have now all of those complete responders are still in a complete response three years later. By the definition of the complete response endpoint, we will not be having the data by close to the PDUFA date. We anticipate that, of course, in 2026, 2027, we will be reporting on those data. As you can imagine, there is a high level of excitement from the patients for this trial, especially in view of the safety that we have shown, the efficacy that we have shown, the ease of administration, the route of administration, which is a sub-Q, like you are getting a flu shot basically. Obviously, the durability of the response that is being seen by the patients.

I think this further has added to the enthusiasm of the patients and investigators and also really the physicians for this trial.

Swayampakula Ramakanth (Managing Director)

Thank you.

Helen Sabzevari (President and CEO)

Yeah. In regard to, my apologies, in regard to the UltraCAR and AML, as we will be having the discussions with the FDA, we will be giving the update. Also, we are looking at the proper venue to show the data, and we will be translating those information in the near future.

Swayampakula Ramakanth (Managing Director)

Thank you. Thank you, Helen. Thanks for all that.

Helen Sabzevari (President and CEO)

Thank you.

Operator (participant)

Your next question comes from Jennifer Kim of Cantor. Your line is already open.

Jennifer Kim (Equity Research Director)

Hi. Thanks for taking my questions. Maybe to start off, to follow up on one of the previous questions, I just want to clarify. Will the FDA's manufacturing facility inspection come ahead of the mid-cycle review? I assume that's happening in late May. Do you think you'll have a sense by the mid-cycle review how the FDA is thinking? Maybe we can start there.

Rutul Shah (COO)

Thank you, Jennifer. Rutul here. I think, yes, we do anticipate a pre-approval inspection of the AI before the approval. As Helen had mentioned in response to the prior question, that it's part of the regulatory process. We are not able to comment on the timing at this point. As we have mentioned, we look forward to hosting them, and we anticipate that inspection before the approval.

Jennifer Kim (Equity Research Director)

Okay. Maybe a question for Phil. The 500 doctors that you're initially targeting, what % of market does that capture? Could you give some color on how the internal sales force is coordinating with the EVERSANA partnership?

Phil Tennant (Chief Commercial Officer)

Right. Yeah. I mean, those 500 ENTs that I mentioned, I mean, they'll be responsible for the vast majority of the patients that we believe are out there. There is obviously a community presence as well for patients. That is something that we're not ignoring. Again, we feel that the concentration is in the urban centers, and that's how we'll be thinking about our field force deployment to a large extent. All the field teams are through EVERSANA. We're not having any Precigen employees that are in the field as such. They will all be through EVERSANA, but obviously, they will act like Precigen employees through that strong partnership with EVERSANA. The other important thing to stress—sorry, Jennifer. The other thing important to stress, I did mention it in my prepared notes, was that they're dedicated to PRGN-2012.

Jennifer Kim (Equity Research Director)

Okay. That's helpful. If I could squeeze one more question in for Phil. In your discussions with payers, is the expectation still that, I guess, the access to the treatment, if approved, would depend mostly on treat-to-trial criteria and label versus a medical exception? Or how have those discussions evolved?

Phil Tennant (Chief Commercial Officer)

Yeah. We continue to—it's a great question. We continue to speak to many payers. We've actually now spoken to payers that represent collectively over 300 million lives in the U.S. We're getting a consistent response that the price range that we've been talking with them about, we're likely to see some degree of utilization management, some prior authorizations. We hope that that is PA for label. That's what we are trying to achieve. There are some payers who would actually include inclusion and exclusion criteria. We feel that we have a strong case. We're building strong value propositions to make sure that in either of those scenarios, we're in a great position. Medical exception is really the last resort in terms of where we think some of these payers will go based upon the discussions that we have.

We're preparing ourselves with a strong value proposition to complement the clinical value proposition that we have.

Helen Sabzevari (President and CEO)

I think, Jennifer, it's from the perspective of, obviously, that this would be for all RRP patients. The recent data have shown when these patients even receive—when they have received up to five surgeries, the damage to the vocal cords and trachea becomes irreversible. You can imagine that it becomes very important in a setting that treats the patients prior to getting to this level. Obviously, the payers also recognize that in basically the effect of the surgery on patients, that on their life, on the irreversible damage, but also on the losses that occur as a result of all of that. I think this is one of the very important parts of the recognition by the payers here.

Phil Tennant (Chief Commercial Officer)

Yeah.

Jennifer Kim (Equity Research Director)

That's helpful. Thanks, guys.

Operator (participant)

Your next question comes from Brian Cheng of JPMorgan. Your line is already open.

Brian Cheng (Executive Director)

Hi, Helen. Thanks for taking our questions this afternoon. Maybe just first, can you give us an update on the latest on where you are in preparing sites to administer 2012? You talk about there are 500 initial doctors. Can you talk about how the initial 500 doctors overlap with those initial sites that are ready to go to administer 2012? We have a follow-up. Thank you.

Phil Tennant (Chief Commercial Officer)

Thanks, Brian. I mean, there's nothing overly complex about administering the drug at the site or special preparation that really needs. We know we have cold chain requirement, but we know we're for subcutaneous injections. Nothing in the research that we've done in the sites that we're speaking to suggests that there's anything in terms of special preparation that is required other than that to think about. At the academic institutions, the large IDNs, they're well equipped. We're obviously understanding exactly what that last 100 yards for the drug journey looks like. We're speaking to them regarding that so that basically we deliver a seamless distribution service as possible from ordering the drug to the patient. That's been the focus. There's nothing particularly complex or special that we need to call out in terms of preparation.

Brian Cheng (Executive Director)

Okay. Maybe just one on your thoughts on pricing and payer access. Maybe just one is, what's your latest take on pricing for 2012? On the pricing standpoint, can you talk about how we should think about access here when it comes to your agreement with payers? Do you think that a value-based agreement will be expected here? Any initial thoughts just based on your ongoing engagement with payers will be very helpful.

Phil Tennant (Chief Commercial Officer)

Yeah. Sure. As I said earlier, I mean, we continue to speak to payers, and we continue to get a fairly consistent response in terms of the value proposition, economic, and clinical that we're making. Nothing's really changed in that regard. Value-based pricing, I mean, I know it's out there. It's something that's being considered. The payers tend to have a view that it's attractive in theory, difficult in practice sometimes. We're exploring that a little bit more. Again, we believe the price point and the way that we'll bring this value to the market is going to be relatively straightforward and something that is within the wheelhouse of these institutions and not something that they haven't seen before.

Helen Sabzevari (President and CEO)

Yeah. Also, Brian, maybe I can add just a thought. Obviously, as we have communicated before, this is a rare disease with no standard of care for the past, for the whole century, to be honest. Payers recognize that, and they recognize also the losses to these individuals, not only the financial but the emotional and also from a life perspective. On top of that, one of the things that becomes very, very important, and the payers appreciate in discussions that we have had, is very clear: the safety that this drug delivers, the efficacy, which is unseen prior by any treatment, 51% complete responders. As I mentioned today and updated actually for the first time, we have now the median standing at 24 months, but also our Phase I, all the complete responders from a phase I study that we started in 2021.

They are still in a complete response. This is another important part of the discussions that payers are very much appreciative of in regards to the efficacy, durability of response, the ease of administration, and also the effect that it has not only on stopping the disease for the majority of these patients as complete responders and reducing the requirement for surgeries in 86% of the patients, but also from the fact that once they get in, and the earlier that they get in with our PRGN-2012, it can really affect and reverse the situation, not to get to the situation that now there is irreversible damage to the vocal cords or the trachea of these patients. As a result of that, there is a permanent and lifetime damage. I think that's another extremely important value out there that they do pay attention to.

Brian Cheng (Executive Director)

Great. Thank you so much for answering the questions.

Helen Sabzevari (President and CEO)

Sure. Thank you.

Operator (participant)

There are no further questions at this time. I would hand over the call to Dr. Helen Sabzevari for closing remarks. Please go ahead.

Helen Sabzevari (President and CEO)

Thank you. As we move one step closer to commercialization, I want to take this opportunity to thank our team at Precigen for their tireless work and steadfast dedication to bringing PRGN-2012 to market. Our team understands that patients with RRP are burdened significantly by this disease and that with surgery, there are innumerable risks to their health and for long-term irreversible injury. Our team is actually and acutely focused on delivering the first and only FDA-approved therapy to the RRP community as quickly as possible. With that, I wish you all a very good evening, and thank you for participating in our call.

Operator (participant)

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.