Bellicum Pharmaceuticals, Inc. (NASDAQ:BLCM) Q3 2019 Earnings Conference Call November 6, 2019 5:00 PM ET
Robert Uhl - Westwicke IR
Rick Fair - President and CEO
Atabak Mokari - CFO
Aaron Foster - Head, Research
Conference Call Participants
Wangzhi Li - Ladenberg
Greetings, and welcome to the Bellicum Pharmaceuticals Third Quarter 2019 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host Mr. Robert Uhl, Westwicke IR. Please go ahead, sir.
Thank you, Jerry. Good afternoon, everyone, and thank you for joining us. With me today on the call is Rick Fair, Bellicum's President and Chief Executive Officer; and Atabak Mokari, Chief Financial Officer. Later during the Q&A session, Aaron Foster, Head of Research will also be available.
Earlier this afternoon, Bellicum released financial results for the third quarter ended September 30, 2019. If you have not received this release or if you would like to be added to the distribution list, you can do so on the Investor Relations page of the company's website.
As a reminder, today’s conference call will include forward-looking statements made under the Private Securities Litigation Reform Act of 1995, including statements regarding our research and development plans, clinical trials, plans regarding regulatory filings, review and approval of our product candidates, commercialization expectations and our financial outlook. These forward-looking statements involve a number of risks and uncertainties and reflect our opinions only as of the date of this call. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Actual results may differ from those indicated by these forward-looking statements due to numerous factors, including those discussed in the Risk Factors section of our Form 10-Q for the quarter ended September 30, 2019 filed with the Securities and Exchange Commission.
And now, I will turn the call over to Rick Fair, Bellicum's President and CEO.
Thanks Robert. Good afternoon, everyone. Thanks for joining us.
On our call today, I'll provide an update regarding the progress we've made to focus the company exclusively on our GoCAR pipeline, which was the basis for our recent financing. I’ll also provide an update on our efforts to identify partners for rivo-cell and our manufacturing facility.
Let me begin by highlighting our GoCAR platform driven by our inducible MyD88 and CD40 activation switch, what we call iMC. As a next-generation CAR-T platform, we believe iMC may improve upon current generation products in several ways.
First, costimulatory molecules MyD88 and CD40 enhanced cell proliferation and persistence. Second, our preclinical research suggests iMC may modulate the tumor microenvironment by overriding common inhibitory pathways, such as PD-1, PGE2 and TGF-beta. Third, we believe that iMC may enhanced host immune activity to complement GoCAR-T efficacy by inducing pro-inflammatory cytokines and chemokines time.
And finally, because iMC is driven by our switch technology we can control the timing and frequency of cell activation through the infusion of our small molecule rimiducid.
In our dual switch product candidates, we improved controllability further by incorporating our CaspaCIDe safety switch which can be used to manage acute toxicities quickly. These control features may enable clinicians to better manage the benefit risk profile of treatment.
With that background on the platform, I'll now provide an update on our GoCAR pipeline. Our first GoCAR-T product candidate BPX-601, targets prostate stem cell antigen or PSCA. Our initial target indication is pancreatic cancer as PSCC is up regulated in cancer cells in approximately 50% of patients.
At the ASCO annual meeting in June, we presented clinical trial data that showed further evidence that our GoCAR technology can boost expansion and persistence of T cells and production of pro-inflammatory cytokines in patients treated with just a single dose of rimiducid. There were no dose limiting toxicities observed and adverse events associated with BPX-601 or rimiducid were generally mild to moderate.
While the single dose schedule of rimiducid in this study was intended to evaluate safety and not optimized for efficacy, some clinical activity was observed of the 13 patients valuable for efficacy who received treatment with BPX-601 and a single dose of rimiducid. Eight patients were 62% achieve stable disease, including three with tumor shrinkage of up to 24%.
Based on these encouraging results, we advanced the trial to enroll the next patient cohort, cohort 5C to evaluate repeat rimiducid dosing. As a reminder, IMC was designed to be activated on a regular basis. Our preclinical experience suggests that regular rimiducid dosing can reactivate and expand to GoCAR-T cells over time without creating T cell exhaustion maximizing the clinical efficacy potential.
As we initiated cohort 5C we've experienced a delay in enrollment. There are three primary reasons for this. The first has to do with the eligible patient population. Prior to opening this cohort, we amended the protocol to recruit only second line patients with pancreatic cancer. The intent here is to enroll more homogeneous patient population in which to evaluate potential efficacy signal compared to the very late line patients we enrolled in dose escalation.
This means we're now screening patients undergoing first line treatment whose median time to progression can be significantly longer, up to seven months depending on first line therapy. We can certainly have patients in screenings who has tested positive for PSCA, but will not be eligible to enroll until they progress from their first line therapy. The second reason for delay has been some logistical challenges in opening new sites and processing tumor samples. We've worked through these issues as they've arisen and now have three sites actively screening patients and a fourth initiating now.
The third reason has been screen fail rate. We've had a modestly higher rate in this cohort of patients who either PSCA negative or his tumor sample was inadequate to determine PSCA status. This is inconsistent with prior cohorts and it's based on a small number of patients. We don't expect this to be a persistent enrollment problem. We've undertaken numerous measures to increase screening and enrollment, including addressing the logistical issues I mentioned, identifying it opening new sites.
That said with the delayed enrollment we now project interim results for this cohort in the second half of 2020. In the interim, we intend to present new translational data from cohort 5B at a medical meeting early next year. These data are expected to provide new evidence on the proposed mechanisms of action of IMC activation and BPX-601, including a cell expansion and persistence, cytokines, production, tumor infiltration and modulation of the tumor micro-environment. Based on the data we've seen so far, we remain optimistic about BPX-601 as a product candidate and as a proof of concept for our GoCAR platform.
Now let's turn to BPX-603, that comes first dual switch product candidate which has been designed to target solid tumors that expressed HER2. We're excited about our dual switch platform given its potential for the combination of efficacy and safety benefits. We selected HER2 as a target for BPX-603, because it's a thoroughly validated target antigen for cancer therapy. With clinical activity and reasonable safety observed and academic CAR-T trials targeting HER2
These previous HER2 CAR-T approaches have been limited by modest efficacy and off tumor on target toxicity. We believe our dual switch technology may be uniquely suited to improve upon these earlier efforts by driving greater efficacy through MC signaling and managing toxicity via our switch platform.
Earlier this year, we submitted an IND application for BPX-603. The FDA has requested additional preclinical data to better characterize the potential risk of loss tumor on target toxicity and potential mitigation strategies before clinical trial can be initiated. We're engaged in discussions with the FDA to align on the plan to address their request. We will update you further and our plans and estimated timelines once we align with the FDA.
So turning to our third GoCAR-T product candidate, we've revised our plans based on a combination of factors, emerging scientific findings, encouraging preclinical progress, and the resources that we have available to commit to this asset. For those of you who follow us closely, I'm sure you've heard us talk about our third pipeline program, a team CAR-T candidate that was advancing to IND.
Based on our progress in research we have greater conviction that our technology can provide unique benefits to allergenic CAR-T and CAR NK Cells. We've decided to reallocate the resources dedicated to this third program to an allergenic off the shelf CAR program. Theoretical benefits of allergenic cell therapy are clear potential for increased activity of immune cells from healthy donors instead of cancer patients, faster and more certain time to treat them, greater scalability, greater convenience, and potentially lower cost to name a few.
There are also important limitations to overcome, poor expansion and persistence of these cells may reduce response and durability. Allergenic cells may cause GVHD, and genetically modifying the cells to prevent this may impair their function. They can also be difficult to manufacturer at scale.
The GoCAR-T platform is designed to address many of these limitations, driving cell expansion and persistence and enhancing host immune activity to potentially increase response and durability while providing control mechanisms to help manage toxicity. We're excited about the potential for an allergenic GoCAR-T and will update you on our plans for this new program on a future call.
For those of you attending the SITC meeting later this week, we will be presenting a poster with some of our CAR NK preclinical data. The data show that MyD88 and CD40 signaling improves an NK Cytotoxicity, which has the potential to improve efficacy against tumors expressing variable levels of target antigen.
Further, the data illustrates that MC signaling synergizes with transgenic IO15 production to improve CAR NK Cell in vivo proliferation and persistence, enhancing tumor control and multiple tumor models. As poor proliferation and persistence have been limiting barriers to the development of effective NK cell therapies, we are encouraged about the impact MC signaling may have in this setting.
Now I’ll provide an update on our partnership discussions first with rivo-cell. Concurrent with our positive data announcement in July, which included a thorough strategic assessment of the program we came to the decision to identify a partner to further develop and commercialize this product candidate. While we continue to have discussions with potential strategic partners it's unclear if an agreement will be reached. As a result, we've decided that it's in the best interest of Bellicum shareholders to pause our reverse cell related activities until a partner has been secured.
Turning to our manufacturing operations as a reminder, we built our Houston manufacturing facility to support our early CAR-T programs the rivo-cell Phase III clinical trial and early commercialization in the U.S. Given our decisions on rivo-cell our facilities substantially underutilized with a significant fixed cost base. Preserved capital for our GoCAR-T programs we are actively pursuing a partner for the facility with the goals of reducing operating costs while maintaining critical viral vector and cell therapy development capabilities and dedicated manufacturing capacity.
With that, I'd like to hand the call over to Atabak to review our financials.
Bellicum reported a net loss of $32 million for the third quarter of 2019 and $83.5 million for the nine months ended September 30, 2019, compared to a net loss of $23.8 million and $70.8 million for the comparable periods in 2018. The results included noncash share-based compensation charges of $1.6 million for the third quarter of 2019 and $3.7 million for the comparable period in 2018.
R&D expenses were $14.3 million $51.0 million for the third quarter and nine months ended September 30, 2019, respectively, compared to $16.4 million and $51.4 million during the comparable periods in 2018. The reduction in expenses in the third quarter of 2019 resulted primarily from reduced expenses related to rivo-cell, and reduce general R&D expenses, partially offset by higher expenditures related to the GoCAR-T platform.
General and administrative expenses were $9.2 million and $24.3 million for the third quarter and nine months ended September 30, 2019 respectively, compared to $7.0 and $18.0 million during the comparable periods in 2018. The higher expenses in the third quarter of 2019 relative to the comparable period in 2018 or, primarily due to an accrual of severance costs arising from reductions and rivo-cell related activities.
Now turning to the balance sheet as of September 30, cash, restricted cash and investments totaled $106.9 million. In the third quarter, we had a cash burn from operations of approximately $19 million, which was a decrease from prior quarters, given the steps we have taken to streamline the organization.
In August, the company announced receipt of aggregate gross proceeds of $69.6 million, including gross proceeds of $57.5 million from an underwritten public offering and a $12.1 million private placement option fee related to its private placement of up to $70 million and additional potential gross proceeds. Based on current operating plans, Bellicum expects the current cash resources will be sufficient to meet operating requirements into 2021.
And now I'll hand the call back over to Rick.
In closing, we made significant progress this quarter in repositioning the organization to focus on our GoCAR-T platform. We remain very excited about the potential of our GoCAR-T pipeline, and look forward to reporting progress on these programs as we head into 2020.
I'll now open the call to questions. Operator?
[Operator Instructions] The first question is from Wangzhi Li, Ladenberg. Please go ahead. Ms. Li are you there. I'm sorry she doesn’t seem to be answering.
We have a question from Steve Seedhouse, Raymond James. Please go ahead.
This is [Daniel Cardenas] on for Steve Seedhouse. Thank you for taking the questions. I just have a couple here. First with respect to BPX-603 and you have the request for additional information can you provide any sort of updated timeline for the program? And do you view this request or something that you can address fairly quickly or are you going to need to run in additional preclinical studies, any color would be very useful here. Thank you.
Yes, thanks for the question Daniel. Unfortunately, we can't provide any additional color at this point. We're actively in discussion with the FDA and I think it would be premature to comment. So we'll certainly provide additional guidance once we've completed those conversations and have an agreed plan.
And I just have a follow-up question about the rivo-cell activity. So you mentioned that you will be putting these activities on hold until you find the partner. Can you provide a little bit more details on what that would translate to financially going forward, how should we be thinking about that?
You know, I’d like Atabak answer that.
Sure, so as you'll recall, our quarterly burn historic over the past 12 to 24 months has been in the $20 million range and loaded to mid $20 million per quarter. And following a number of activities, including the pausing rivo-cell related activities and other initiatives that we discussed we expect that to be reduced pretty substantially closer to the mid-teens kind of range.
[Operator Instructions] We now have a question from Wangzhi Li, Ladenberg.
Hi, thanks for taking my question sorry, I forgot to un-mute the microphone. So, first question about the enrollments, you mentioned the number of reasons but could you help me better understand the reason or the challenges to open sites you mentioned some biopsy or - just why this trial is more difficult to open more sites than other trials?
Yes, thanks for the request. I'd say the logistics of the opening were some one-off things that probably are not chronic or consistent. As mentioned, all the sites are open and are actively screening. The logistics around tumor biopsies are our lab tests currently requires tumor blocks. And what we've heard from one of our sites is it's difficult for them to procure tumor blocks from some of the referring physicians that slides are easier when the process of evaluating our diagnostic to ensure that it can work on a slide so that's really the logistics issue around tumor samples.
I'd say right now the screening rates risk we have three sites screening consistently, and a fourth one coming online now and they are looking for two to four additional sites for the next phase in the study.
But at this moment you have any patient enrolled or is still in the screening kind of process?
We currently have no patients enrolled in this cohort, but we have as mentioned multiple patients who are PSCA positive but still on first line therapy. And again, a very I would say brisk cleaning radius moment. So we expect to be able to enroll there, shortly.
And some other cohort the 5B data early 2020, what kind of they actually doing how many samples I mean, it looks like a you have biopsy data to present right micro tumor micro-environment?
Right, so we have biopsies, you'll recall that patient cohort 5B had five patients. So you'll see depending on the analysis, different numbers of patients that were all are at subset of those five patients. So certainly preliminary data but interesting, we look forward to showing you.
So every patient has a biopsy?
I believe we have biopsies from all of the - all five of those patients. Aaron, maybe you can comment on that?
Yes, we do have biopsies. We've currently evaluated three out of the five, looking for CAR infiltration and some other characteristics of the biopsy.
I mean last question I know you already mentioned that you cannot comment too much on BPX-603 but it's curious because they are multiple HER2 CAR-T [indiscernible] off switch as a safety, additional safety CAR safe CAR, right. So can you help me understand what's the particular reason for FDA to have more extra concern is just regular more data or is a particular reason for that?
Yes thanks for the question, Wangzhi and it's a logical one. I would say, we designed our construct very carefully to try and increase the activity of HER2 CAR-T therapy. You'll recall that the academic experience which has been driven largely by Baylor College of Medicine and to a lesser extent by a center in China has seen activity but not really clinically meaningful activity.
And so, we’re looking to increase the potency. And we really did that through a couple of design features. We've used a higher affinity binder, a single chain variable fragment and the Baylor construct. And of course, we've incorporated our iMC activation switch which is the core technology of the company and is intended to drive expansion persistence modulation of the tumor micro-environment greater activity.
I think it's really based on those two novel features of this construct that the FDA has asked questions about potential off tumor on target toxicity. We certainly reinforce that we have the safety switch incorporated in the vector so that it showed patients experience toxicities. There is a way to manage that, but I also remind in our dual switch construct that the safety switch is a modified version of CaspaCIDe, which doesn't use or misuse is activated but uses tensor elements.
So, we don't have - while we have great preclinical data showing those two safety switches work identically, we don't yet have clinical data supporting the efficacy of the tensor elements driven safety switch. So and those are probably the variables that the FDA is waiting, they're thinking and, again, we're engaged in dialogue with them to work through those questions and make sure that we can answer them rigorously.
There are no further questions in the queue at this time. I'd like to turn the floor back over to Rick Fair for closing comments.
Thanks Jerry. Thanks, everyone. Appreciate you participating today. As always, I'd like to thank our passionate team of palliations, our collaborators, our investigators for all their efforts, including, and most importantly, I would say our patients and families who've participated in our trials. They inspire our effort here each and every day. Thanks. Have a great evening.
This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation. And have a nice evening.