Adaptimmune Therapeutics PLC (ADAP) CEO Adrian Rawcliffe on Q3 2019 Results - Earnings Call Transcript

Nov. 10, 2019 8:50 AM ETAdaptimmune Therapeutics plc (ADAP)3 Likes
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Adaptimmune Therapeutics PLC (NASDAQ:ADAP) Q3 2019 Earnings Conference Call November 6, 2019 8:00 AM ET

Company Participants

Juli Miller - Director, IR

Adrian Rawcliffe - CEO, Principal Accounting Officer & Director

Elliot Norry - Acting Chief Medical Officer

John Lunger - Chief Patient Supply Officer

Michael Garone - Interim CFO

Conference Call Participants

Mohit Bansal - Citigroup

Marc Frahm - Cowen and Company

Tony Butler - Roth Capital Partners

Nicholas Abbott - Wells Fargo Securities

Michael Schmidt - Guggenheim Securities

Daniel Leather - Polygon

John Barrett - SVB Leerink


Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2019 Adaptimmune Earnings Conference Call. [Operator Instructions].

I would now like to hand the call over to Juli Miller. Please go ahead.

Juli Miller

Good morning, and welcome to Adaptimmune's conference call to discuss our third quarter 2019 financial results and other business updates. We issued a press release earlier this morning, and I would ask you to please review the full text of our forward-looking statements there.

As a brief reminder, we anticipate making projections during this call and actual results could differ materially due to a number of factors, including those outlined in our latest filings with the SEC.

Adrian Rawcliffe, our Chief Executive Officer; and Elliot Norry, our acting Chief Medical Officer, are with me for the prepared portion of this call. Bill Bertrand, our Chief Operating Officer; Helen Tayton-Martin, our Chief Business Officer and Co-Founder; Mike Garone, our Interim Chief Financial Officer; and John Lunger, our Chief Patient Supply Officer, will all be available for Q&A after the prepared portion.

With that, I'll turn the call over to Adrian Rawcliffe. Ad?

Adrian Rawcliffe

Thank you, Juli. Good morning, everyone, and thank you for joining us. This is the first quarterly call since I took over as CEO at the beginning of September. One of the commitments that I made when I took the role was to focus on execution to bring benefit to people with cancer and value to our shareholders in the short term.

Our priority remains to bring our ADP-A2M4 therapy to market in 2022 for people with sarcoma, which is a truly devastating cancer. Recently, we presented data at ESMO, demonstrating a clear benefit for people with synovial sarcoma. And Dr. Van Tine, who presented these results, refer to them as phenomenal.

I witnessed firsthand the excitement amongst the sarcoma community and the interest from health care professionals has been reflective of this. Elliot, our acting CMO, will speak more about this later.

With these compelling results, enrollment in our SPEARHEAD-1 trial has started well and we believe will accelerate rapidly. We have opened multiple clinical sites with others lined up to screen and treat patients.

Given the significant unmet medical need for these patients. We are pleased that the FDA granted Orphan Drug Designation to ADP-A2M4 for the treatment of soft tissue sarcomas as we are eager to make this therapy available as quickly as possible. These achievements, in conjunction with our commercial readiness initiatives, are encouraging progress towards having our first marketed SPEAR T-cell therapy in 2022.

Next, I want to set out the basis upon which we believe that the SPEAR T-cell platform has broader applicabilities in sarcoma and how we are moving forward in these other solid tumors.

Firstly, the data in sarcoma demonstrates that the affinity-engineered T-cell receptor are the heart of our SPEAR T-cells. In this case, the T-cell receptor targeting MAGE-A4, can successfully engage with its target, trigger the T-cell to attack the tumor cells and deliver compelling anti-tumor responses, clearing large tumor bulk over a period of 6 months.

Through our translational research, we have demonstrated SPEAR T-cell infiltration into tumors as well as recruitment of other T-cells to the tumor site. We have also seen cytokine induction in responders versus nonresponders, and that SPEAR T-cells isolated from patients post infusion can kill target cells in-vitro. The wealth of translational data underscores that the SPEAR T-cells targeting MAGE-A4 are functioning properly in people with synovial sarcoma. We will present an update on the translational data at SITC with a case study of 2 sarcoma patients from our ADP-A2M4 Phase I trial.

Secondly, we have seen activity in other solid tumors beyond sarcoma with our first-generation products targeting NY-ESO, MAGE-A4, MAGE-A10 and AFP. In these other solid tumors, whilst no patients have had resist responses to date, we have seen measurable reductions in the size of the target lesions in multiple patients across 5 different solid tumor types.

Thirdly, building on these data and insights, we have 3 approaches to convert this activity we have seen outside sarcoma into meaningful benefit for patients. The first approach is our next-generation program targeting MAGE-A4 designed to convert CD8 or killer T-cell functionality on all of the transfused T-cells, effectively increasing the potency of the cells administered. As you know, this product is currently in a dose escalation trial, the SURPASS trial, with initial data expected in the first half of 2020.

The second approach is our low-dose radiation substudy at the MD Anderson Cancer Center. This is designed to demonstrate the benefit of increased trafficking of T-cells to the tumor. Again, this study continues to enroll and we anticipate results from this trial in 2020.

And finally, the third approach, as announced today, and based on emerging translational data to be presented at SITC, is that we will initiate a clinical trial combining ADP-A2M4 with a PD-1 pathway inhibitor in 2020. With these 3 approaches, we are progressing rapidly to convert the activity we have seen in a broad range of solid tumors into meaningful responses by increasing the potency of the cells, their trafficking to the tumor and their activity in combination with checkpoint inhibitors.

We were the first company to demonstrate robust responses with an engineered T-cell therapy in solid tumor. We believe we are leading the efforts to show responses in a range of solid tumors with initial data expected in the first half of 2020.

And with that, I'll turn the call over to Elliot to provide a clinical update before I conclude and open the Q&A. Elliot?

Elliot Norry

Thank you, Ad, and thanks, everyone, for joining us. My colleagues and I and our clinical group have been focused on delivering data from our clinical trials, and most importantly, on developing meaningful therapies for patients who need them. As Ad said, there is a high unmet medical need in patients with sarcoma. Sarcomas are cancers that typically occur in a younger patient population, striking people in their prime. There are very few treatment options available for these patients and there are even fewer options available to patients like those in our trials with advanced disease who have failed other lines of therapy.

To date, we have seen that ADP-A2M4 works in synovial sarcoma with impressive data presented at ESMO from our Phase I trial. We demonstrated a disease control rate of 92% and a response rate of 58% in 12 evaluable patients. These results are even more impressive given that most patients in our trial were heavily pretreated, and the median age was 53, which is older than the typical synovial sarcoma patients.

We have also seen large bulky tumors being reduced, and this has the potential to be a truly revolutionary therapy in this rare disease. Reducing large tumors, the size of which often negatively impacts patient quality of life and can preclude resection to a smaller size that can be surgically addressed, is a treatment goal for sarcoma. The durability of these responses continues to mature, and we will provide updates as data become available. These data have been impressive enough to support starting our Phase II SPEARHEAD-1 trial in synovial sarcoma and another type of sarcoma, myxoid/round cell liposarcoma. Following our presentation at ESMO, we have had physicians in clinical trial centers reaching out to us eager to enroll patients.

We have also made progress in our ADP-A2AFP program in liver cancer, with the recent endorsement from our safety review committee to move to the third dose cohort in this trial. I've had the privilege to serve as the clinical lead for this program. And given that the target, AFP, can also be expressed in noncancerous liver tissue, it was incredibly important to ensure that this therapy would be safe for patients. To date, we have seen no evidence of liver toxicity or T cell-mediated toxicity in the first 2 dose cohorts. In the third cohort, patients will receive a target dose of 5 billion SPEAR T-cells with a range of 1.2 billion to 6 billion cells in our standard preconditioning regimen.

We have seen early indications of anti-tumor activity at lower doses and with less intense preconditioning with evidence of tumor necrosis, a decrease in the size of lymph node metastases and transient decreases in serum AFP levels. Beyond sarcoma and liver cancer, we have seen reductions in the size of lesions in 4 other solid tumor indications. To date, including previously reported results, there are with ADP-A2M4, 1 patient with ovarian cancer who had a 27% reduction in target lesions, and 1 patient with melanoma who had a 40% reduction, and 1 patient with head and neck cancer who had a 21% reduction. With ADP-A2M10, we have seen a 28% reduction in 1 patient with lung cancer.

While none of these met the criteria for a resist response, these data indicate that our SPEAR T-cells are active. We are working to convert these early indicators of activity into durable responses. We have an ongoing next-generation trial with our ADP-A2M4 CD8 SPEAR T-cells targeting MAGE-A4, the SURPASS trial as well as the radiation substudy of our ADP-A2M4 Phase I trial. And as Ad mentioned earlier, we plan to start a combination trial with a checkpoint inhibitor in 2020. I have been with Adaptimmune since 2015 and have been able to see our progress from the early days of NY-ESO up to where we are now, driving to launch ADP-A2M4 in sarcoma in 2022. Making a difference for patients with cancer is a passion for me and each and every one of my colleagues at Adaptimmune, and we are eager to deliver.

And now I will turn the call back to Ad.

Adrian Rawcliffe

Thanks, Elliot. Our first priority is patients. By delivering to patients, we believe we will deliver value for investors. And we have compelling data indicating that our SPEAR T-cells work and will continue to execute effectively. I am aware of the frustration around our current share price. We are implementing cost-management initiatives and we're evaluating priorities across our preclinical and clinical portfolio. And I continue to believe that we're in a strong position to deliver value for investors through the timely execution of the SPEARHEAD-1 trial to enable launch of ADP-A2M4 in sarcoma in 2022, by demonstrating the efficacy of our SPEAR T-cells in other solid tumors through SURPASS ADP-A2AFP and combination trials and by leveraging our world-class capabilities beyond our current autologous SPEAR T-cell platform.

Now I'd like to open the call up for questions. Operator?

Question-and-Answer Session


[Operator Instructions]. Our first question comes from Mohit Bansal of Citi.

Mohit Bansal

Great. Just a couple of questions. So if I may, first of all, look, you mentioned that with your [indiscernible], you are -- with your therapy review of ADP-A2M4, you are seeing some responses but they are not reaching to the resist criteria at this point. Can you just remind us at what doses you have seen these responses? And would it require more self-care? Or how do you see the next-generation SPEAR T-cells actually improving these responses at this point?

Adrian Rawcliffe

Certainly. So I want to be clear, we've seen what we are referring to as activity across a broad range of solid tumors. We have been clear, those do not rise to the level of RECIST criteria responses, but they are measurable reductions in a range of different tumors, across 5 different solid tumors -- with patients who have 5 different solid tumors.

The objective of the -- we also see with those patients, we see expansion of the T-cells and so the antigen-driven expansion of the T-cells. And therefore, we do not believe necessarily that it is a question of [indiscernible] dose. And we're dosing those patients in the 1 billion to 10 billion cell range. We also see infiltration of those T-cells into the tumors where we have biopsies. And so we believe that the approaches that we're taking with the second-generation approaches that I outlined are the correct approaches to take to convert those levels of activity into durable responses for patients.

And just to reiterate, the more potent T cells from our ADP-A2M4 CD8 SURPASS study, the driving and further infiltration into the tumor using low-dose radiation with the -- low-dose radiation substudy with MD Anderson and the just announced PD-1 combination study that we intend to initiate next year. Those are 3 approaches, all of which address the potential mechanisms of resistance or lack of robust durable responses in those patients.


Our next question comes from Marc Frahm of Cowen and Company.

Marc Frahm

Just thinking forward to the SURPASS and you're guiding that we'll see some data in the first half of next year. Can you maybe give a little bit of clarity as to kind of how large of a data set or how robust in terms of follow-up you might expect to be able to present then? And then is there any competition that you're seeing kind of between SPEARHEAD and SURPASS for enrollment? Or are there plenty of patients out there because there are some overlap at centers?

Adrian Rawcliffe

Yes. Yes. So maybe I'll comment on the first point on the data and what we're planning to put out in the first half of next year. And then I'll ask Elliot to comment on the recruitment between those 2 studies.

So with respect to the data next year, we are in dose escalation trials. I would just point out, we announced this study in May. We announced the first site initiation visit in July. We are recruiting patients in SURPASS across multiple, multiple sites at this point in time. And with dose escalating, just to remind everybody, the dose escalation is a target dose of 1 billion cells, a target dose of 3 billion cells and a target dose of 6 billion cells in each of the cohorts.

And I don't want to prejudge because we don't know what level of cells we will see efficacy and responses. There's obviously staggers within those patients as well. And so we anticipate being able to give data from those dose escalation cohorts and potentially from patients, from a small number of patients, dosed in the expansion phase once we've completed that. But obviously, that will depend on the speed with which we're able to ramp up in the dose escalation cohorts.

So the short answer, there's not going to be very many patients, but I think it will be useful data for the purposes of determining whether we are seeing an effect in the second-generation that is in excess of the effects that we saw in the first generation product. Elliot, do you want to comment on the recruitment between SPEARHEAD and SURPASS and whether we're seeing robust recruitment in those studies?

Elliot Norry

Sure. So specifically, with respect to competition between SURPASS and SPEARHEAD for patients, it's important to point out that SURPASS is a multi-tumor study recruiting patients in several different tumor types. And SPEARHEAD is focused solely on synovial sarcoma and myxoid/round cell liposarcoma. So there may be a small amount of, as you say, competition for the sarcoma patients, but I think that they will tend to be -- to traffic towards the SPEARHEAD study. And the SURPASS study will enroll patients predominantly from other tumor types. There is some overlap of centers, but there are also centers that are independent for each study. So I don't see competition between those 2 studies for patients to be a major concern.


Our next question comes from Tony Butler of Roth Capital Partners.

Tony Butler

Adrian, in SPEARHEAD, you have great responses, obviously. Disease control rates, very strong, 58% ORR. Question is, as a registration trial, do you think that a fileable solution is in ORR that would be Part A and Part B? If not, what would it be x number of PRs and CRs? Or what would be a hurdle rate that you feel comfortable, the FDA might feel comfortable with?

Adrian Rawcliffe

I'm going to ask Elliot to talk to the design of SPEARHEAD and what we think we can show.

Elliot Norry

Yes, thanks for the question. So with respect to the SPEARHEAD design and hurdles that we may see, we do think that ORR is potentially sufficient for registrable indication. And that's occurred in several indications with other programs in the past. That being said, we do feel that we need to demonstrate clear benefit as compared to therapies that are currently available. And we've set this study up to be able to show statistically relevant differences at a 40% or approximately 40% overall response rate compared to the best responses being seen with other second line treatments behind chemotherapy.

So essentially, we -- to answer your question directly, we do believe that this is a registerable approach. And we also believe that based on the 58% overall response rate seen in the Phase I study that we're optimistic about the capability to achieve an overall response rate that is clinically meaningfully different from currently available treatments to be able to deliver this to patients as we progress through the trial.


Our next question comes from Jim Birchenough of Wells Fargo Securities.

Nicholas Abbott

It's Nick on for Jim this morning. The first question just goes back to the data from ESMO. I think you had two unconfirmed responses in that data set, and also, I believe, two of the partial response -- patients who achieved a partial response had relapsed. So are you able to provide an update on those data? And what do you know about the mechanisms of resistance that limit the duration of a PR and perhaps the ability to induce a response of retreatment? And I have a follow-up.

Adrian Rawcliffe

So I'm just going to say that we are going to be updating those data at CTOS shortly. So I don't think we want to give any further information on the progress of those patients. Elliot, do you -- would you like to comment on the potential mechanisms of resistance and the opportunity to have -- to treat first with the second dose of cells?

Elliot Norry

First of all, with respect to mechanisms of resistance, I don't think that we've seen the durability of response mature fully in the Phase I study as of yet. So ultimately, I do believe that there will be patients that progress and mechanisms of progression are important. And our translational group is working diligently to try and understand that.

As Ad had mentioned earlier, we do see that the T-cells traffic to the tumor. And we're employing in our other studies mechanisms by which to take that translational information around mechanisms of resistance that might relate to trafficking, that might relate to the potency of cells and with our plan to combine with a PD-1 inhibitor to explore whether there are ways around potential mechanisms of resistance going forward.

With respect to second doses of ADP-A2M4 in the SPEARHEAD trial, we are not pursuing that as part of the study design. With -- so I think that it remains a possibility for the treatment of patients with cell therapy to give second infusions, but I think we'll be looking to other mechanisms by which to extend durability beyond just second infusions.

Nicholas Abbott

Okay. And then going back to the abstract CT for SPEARHEAD-1. The abstract stage by IHC, 82% of synovial and 68% of myxoid/round cell samples expressed MAGE-A4 is based -- in accordance with your definition of A4 positivity? And as you process the data coming from the biomarker studies, is that an -- that percentage positivity, is that something that is likely to be modified as you develop these products further?

Elliot Norry

So the positive -- the rates that you quoted for MAGE-A4 are the ones that conform to the hurdle rates for inclusion in the study. The majority -- almost all of the patients that we see in sarcomas that express MAGE-A4 do so at a reasonably high rate. We don't have that many very low MAGE-A4 expressers in sarcoma. And so we don't anticipate, obviously, that those numbers would change given they're based on the latest information that we have. And we have got a decent sample set now of patients that have -- in sarcoma with MAGE-A4 expression based on the screening that we've done to date. So don't anticipate. And the -- I think it's fair to say the majority, the vast majority of patients, 80 patients who have synovial sarcoma, expressed MAGE-A4 robustly would be eligible on that criteria for that trial.

Nicholas Abbott

And then my last one is, obviously, there's been diagrams for NY-ESO expression of MAGE-A4 expression overlap fairly substantially. As you think about bringing this to the marketplace, how do you think physicians will choose between an NY-ESO-1 or a MAGE-A4 product?

Adrian Rawcliffe

So we anticipate they'll do so on the basis of the data that's available at the time. And we also anticipate that, probably, in due course, they will test for MAGE-A2, MAGE-A4, NY-ESO and any other antigens that have relevant products associated with them. And so that will become part of the battery of test that then these products will compete on the efficacy that they're able to show. And that's why we think it's important that we're able to continue with the SPEARHEAD study, demonstrate the efficacy of the A4 targeting SPEAR T-cell in sarcoma and get to market as quickly as possible with that product.


[Operator Instructions]. Our next question comes from Tony Butler of Roth Capital Partners.

Tony Butler

Sorry, one last one. With respect to enrollment sites, none exist at least according to ClinicalTrials outside the U.S. that may be a prohibitive cost to do so. But I'm just curious, Adrian and/or Elliot, your thoughts around not including that in SPEARHEAD. I appreciate it.

Adrian Rawcliffe

Elliot, do you want to take that?

Elliot Norry

Sure. So we do intend to conduct SPEARHEAD in North American and European sites. Without getting into greater detail, it will not just be a U.S.-only trial.


Our next question comes from Michael Schmidt of Guggenheim.

Michael Schmidt

I have one on the AFP program. Maybe just wondering how safety has been looking there to date given the target. I think there are some expression potential in healthy cells as well as the AFP.

Adrian Rawcliffe

Thanks for that. Elliot, the CMO handles lead of that program. Do you want to take that?

Elliot Norry

Sure. So we've dose escalated through Cohort 1 and Cohort 2 for those studies, and we have seen no evidence of liver toxicity in any of the patients treated today. So we'll obviously continue to monitor closely for that in Cohort 3, where the cell dose is escalated to our target dose range of 5 billion, 5 billion SPEAR T-cells, dose range of 1.2 billion to 6 billion. So we're continuing to monitor for that, but we are every encouraged by the fact that in the earlier dose cohorts, we really have seen no evidence of T-cell-related liver toxicity.

Michael Schmidt

Okay, great. And then just maybe a bigger picture question. I think you're guiding to having about 1 year worth of cash in terms of funding the company. Just curious how you think about, maybe bigger picture, strategic initiatives to either, I guess, curb in -- reduce spend and/or maybe leverage some of your infrastructure maybe with partners, I don't know. I'm thinking about your manufacturing facility for example. Is there something that can be done to better leverage the platform as it is with respect to cash burn, for example?

Adrian Rawcliffe

Okay. I'm going to ask Mike, Mike Garone, CFO, to answer that. Mike?

Michael Garone

As per our previous guidance, as has been clear for a while now, we remain funded through the third quarter of 2020. That's beyond the first half of 2020 during which we plan to have key clinical data points coming out. Additionally, we are implementing cost-management initiatives and evaluating priorities across our preclinical and clinical portfolio, for example, ceasing enrollment of ADP-A2M10 by the end of this year. As you can imagine, some of the strategies that we have in place or are currently exploring are not public information yet at this point, and we will update in due course.


Our next question comes from Daniel Leather of Polygon.

Daniel Leather

Two questions. On the manufacturing side of things, have you had any disruption like one or two others might have done with the Stevenage Catapult Center? And secondly, just on the PD-1, will you be paying for that? Or are you happy to have somebody else contribute that towards the trial cost?

Adrian Rawcliffe

So I'll deal with the second one, and then I'll hand over to John Lunger, our Chief Patient Supply Officer, to talk about the manufacturing and Catapult. So with respect to the second one, we've not given any further details as to the structure of that PD-1 combination study. So it would be inappropriate for me to say, but we will update in due course once we've got something to tell everybody about. And John, with respect to Catapult?

John Lunger

Yes. So on Catapult, as you might know, we do our viral vector there. As a matter of fact, we just completed our first manufacturing of a GMP batch for our viral vector. So the short answer is no, we have not seen the same disruptions that other companies have seen out of that facility.


Our next question comes from Jonathan Chang of SVB Leerink.

John Barrett

I just have -- this is John Barrett on for Jonathan. Just a couple of questions. Can you provide a status update for the low radiation substudy and when we might expect to see data from that study?

Adrian Rawcliffe

Yes. So that study is enrolling. And as you know, I just want to point out, it's a 10-patient -- up to 10-patient cohort at a single-center university, MD Anderson Cancer Center. And so we -- it is enrolling and dosing patients, but we will have data from that in 2020. And the only other thing I will point out, just for level setting purposes on this particular study, if you look at the data that has given us confidence that low-dose radiation can drive T-cell infiltration to tumors, those data indicate that the responses often come many months after the radiation administration. And so I just want to give a warning that the time line might not be the classical time line that we are seeing in our sarcoma studies where within 6 weeks, 12 weeks, you're seeing responses.

John Barrett

Interesting. And one additional one. Can you expand on your reasons for confidence in the PD-1 combo? And what type of tumor types would you envision focusing in on for that trial in the future?

Adrian Rawcliffe

So we will be talking about some of the reasons for the confidence that the poster that we are presenting at SITC shortly. And so it would be inappropriate for me to comment on this. I think that SITC poster is on Friday -- presentation is Friday. And so I'm not going to comment on that for obvious reasons. And we've not been -- we've not stated the tumor types yet or the nature of that study.


There are no further questions. I'd like to turn the call back over to Adrian Rawcliffe for any closing remarks.

Adrian Rawcliffe

Thank you, everyone, for your time today. I -- and thank you also for your ongoing interest in our journey to bring effective T-cell therapies to people with cancer, and thereby, to deliver value for our investors. I look forward to updating everybody on the emerging data on the ADP-A2AFP study and the SURPASS trial in the first half of 2020. Thank you again, and enjoy the rest of your day.


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

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