Genocea Biosciences' (GNCA) CEO Chip Clark on Q3 2021 Results - Earnings Call Transcript

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Genocea Biosciences, Inc. (OTCPK:GNCA) Q3 2021 Earnings Conference Call October 28, 2021 8:30 AM ET

Company Participants

Dan Ferry – Investor Relations-LifeSci Advisors

Chip Clark – President and Chief Executive Officer

Diantha Duvall – Chief Financial Officer

Tom Davis – Chief Medical Officer

Jessica Flechtner – Chief Scientific Officer

Conference Call Participants

Ben Burnett – Stifel

Gil Blum – Needham

Colleen Hanley – Baird

Operator

Good morning and welcome to the Genocea Third Quarter 2021 Conference Call. At this time all participants are in a listen-only mode. Following a form of remarks, we will open the call up for your questions. Please be advised to this call is being recorded by the company’s request. At this time, I would like to turn over to Mr. Dan Ferry of LifeSci Advisors. Please go ahead, sir.

Dan Ferry

Thank you, operator. And good morning, everyone. Earlier today, we issued a press release that outlines the topics we plan to discuss today. This release is available at genocea.com under the Investors tab.

During the call today, Chip Clark, President and CEO, will provide a brief corporate update; and the company’s Chief Financial Officer, Diantha Duvall, will review the financial results. After the prepared remarks, we will open up the call for Q&A. And Chip; Diantha, Tom Davis, Genocea’s Chief Medical Officer; and Jessica Flechtner, Genocea’s Chief Scientific Officer, will then be available to answer your questions.

Before we begin, I would like to remind everyone that statements made during this conference call relating to Genocea’s expected future performance, future business prospects or future events or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from those forecasts due to the impact of many factors beyond the control of Genocea. Genocea expressly disclaims any duty to provide updates to its forward-looking statements, whether as a result of new information, future events or otherwise. Participants are directed to the risk factors set forth in Genocea’s 2019 annual report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission.

It is now my pleasure to pass the call over to Chip.

Chip Clark

Thanks, Dan. And thank you all for joining us today. I am pleased to share Genocea’s progress with you today. Most notably, we are excited about our TiTAN™ clinical trial for GEN-011, our lead clinical program. As a reminder, GEN-011 is Genocea’s neoantigen-targeted peripheral blood T cell therapy, or MPT therapy, which we’re testing initially in checkpoint inhibitor refractory people with solid tumors.

We believe using patient T-cells taken from easily accessible peripheral blood and expanding their CD8 and CD4 T-cells preferentially for the patient’s tumor neoantigens prioritized by our proprietary ATLAS™ platform may give GEN-011 efficacy, accessibility and cost advantages over other adopted T-cell therapies. In other words, we believe that better T-cells to better targets may hold the key to success.

I will also remind you that the TiTAN™ trial is a Phase 1/2a study designed to evaluate the safety and tolerability, T-cell persistence and proliferation, and clinical efficacy of GEN-011 as monotherapy. Patients receive either GEN-011 as a single dose preceded by a conventional T-cell therapy, lymphodepletion regimen, and followed by daily high dose IL-2, or GEN-011 split into multiple doses with no lymphodepletion and followed by intermediate IL-2 doses.

We continue to make substantive progress with five clinical sites now active and three more to come online imminently. And with our proprietary PLANET process reliably yielding drug product. Based on this progress we now expect to have initial data from a small subset of patients in the first or early second quarter next year.

We are also pleased that we have multiple poster presentations at next month’s SITC 2021 Annual Meeting. These presentations will continue to showcase the neoantigen selection capabilities of our ATLAS platform through differentiated long-term immunogenicity and clinical response data for GEN-009, our adjuvanted peptide neoantigen vaccine candidate, and through additional research with inhibition and their potential application to novel autoimmune disease treatments.

I am also pleased to welcome Jennifer Herron, Senior Vice President and Chief Commercial Officer at ADC Therapeutics to our Board of Directors. Her extensive oncology experiences nicely compliment those of our other Board members. I’ll close my part of this brief update by saying that I am so proud of the Genocea team for the agility and tenacity they demonstrate as we continue these research and clinical development efforts.

I’m now going to pass the call over to Diantha to summarize our financials from this quarter before opening the call up to questions. Diantha?

Diantha Duvall

Thank you, Chip, and good morning, everyone. We ended the quarter with $48.9 million of cash and cash equivalents compared with $79.8 million at December 31, 2020. Our operating results for the quarter ended September 30, 2021 are as follows. Our net loss for the three months ended September 30, 2021 was $3.6 million compared to $4.6 million for the same period in 2020. Our net loss for the nine months ended September 30, 2021 was $19.9 million compared to $28.7 million for the same period in 2020.

R&D expenses for the three months ended September 30, 2021 were $9.5 million, compared to $7.5 million for the same period in 2020. R&D expenses for the nine months ended September 30, 2021 were $28.7 million, compared to $26.1 million for the same period in 2020. The increase in R&D expenses for both periods is primarily due to growth in our internal research and manufacturing teams and our GEN-011 manufacturing clinical costs.

G&A expenses for the quarter ended September 30, 2021 were $3.9 million, compared to $3.6 million for the same period in 2020. G&A expenses for the nine months ended September 30, 2021 were $11.6 million compared to $10.5 million for the same period in 2020. The increase in G&A expenses for both periods is mainly due to growth in our internal G&A team partially offset by decreased facility costs.

Other income for the quarter ended September 30, 2021 was $8.1 million, compared to $6.2 million for the same period in 2020. Other income for the nine months ended September 30, 2021 was $18.8 million compared to $6.5 million for the same period in 2020. The increase in our other income for both periods is mainly due to the non-cash impact of the fair value adjustment for the $33.6 million liability-classified warrants issued in connection with our July 2020 private placement. Our current operating plan extends our cash runway into the third quarter of 2022.

With that, let’s now open the call up for questions. Operator?

Question-and-Answer Session

Operator

Thank you very much. Your first question is from Ben Burnett from Stifel. Your line is open.

Ben Burnett

Hey, thank you very much for taking our questions. I guess, I was wondering if you could just maybe provide a little bit more color as to what’s behind the shift and timing for GEN-011.

Chip Clark

Hey, Ben, it’s Chip. Thanks for the question. It’s a very marginal shift and I’m actually proud of how small it is given that we set this guidance really at the beginning of the trial, when we were operating with a novel production plan and a novel drug more broadly. So there’s nothing I think substantive to read into this shift of about one month in the window.

Ben Burnett

Okay, understood. I guess, maybe if I could ask one other question, just curious if you could offer more color on what we’ll get at SITC just in terms of additional GEN-009 data.

Chip Clark

Yes. Ben, Tom, why don’t you and then just speak to the clinical and biomarker data that we’ll have there.

Tom Davis

Sure. Thanks, Chip. And thanks for the question, Ben. We’re excited to go into SITC with a good amount of data. Of course, the GEN-009 program was started several years ago and the data has already matured to a certain degree. But the key questions in that program were, first, were we able to generate immune responses and were they going to be durable? Additionally, how long will any clinical effect seen last? And I think, those are the two key elements from the clinical perspective for that program. And we’ll be able to update that at SITC certainly if we’re seeing persistent immune responses and prolonged disease control, we’ll be very pleased.

Jessica Flechtner

And this is Jessica. The additional immunology that we will provide in the posters include immunophenotyping data, where we can give a little bit more color on the types of T-cells that we are generating and some monitoring of biomarkers like cell free DNA.

Chip Clark

And as we said in the script, Ben, I think we’re really pleased with the degree to which these data will continue to differentiate in that.

Ben Burnett

Okay. Super interesting. We’re looking forward to it. Thank you.

Chip Clark

Thank you.

Operator

[Operator Instructions] Your next question is from Gil Blum with Needham. Your line is open.

Gil Blum

Hello and good morning, everyone and thanks for the update. Just a question on the TiTAN study, should we have any expectation of biopsy data at some point. Or is that not part of the protocol and I have a follow-up.

Chip Clark

Gil, just to clarify, I assume you mean – this is Chip obviously, you mean post dosing biopsies, presumably to measure, for example, T-cell infiltration into the tumor.

Tom Davis

Exactly.

Chip Clark

Okay. Yes. Tom, why don’t you handle that question, please?

Tom Davis

Sure. Of course, that endpoint is a key one in cell therapies and we are certainly going to be looking for tumor – infiltration of the tumor by our TiTAN cells. The protocol does require a biopsy post infusions. As you probably know, we can’t guarantee that patients will be able to have biopsies done. But certainly, we are capturing that data a along with a lot of the other data around the activity of the cells.

Gil Blum

All right. And maybe a kind of different question. Are there any business development opportunity with the ATLAS platform potentially with the Inhibigen. Are you guys pursuing that pathway as well?

Chip Clark

Yes. Gil, it’s an important question. And the answer is, yes. We continue to demonstrate that we are finding both the right antigens for inclusion in therapies as well as these Inhibigens, which in the context of cancer appear to be pro-tumor and therefore certainly things you would not want T-cells to be preferentially reacting to in the context of oncology treatment. So we are pursuing business development opportunities in this area and hope to be able to demonstrate progress on this.

Gil Blum

Excellent. Thank you for taking our questions and we’ll be staying at tune and that’s it.

Chip Clark

Great. Thank you

Operator

[Operator Instructions] We have a question from Colleen Hanley from Baird. Your line is open.

Colleen Hanley

Hi, good morning. Thanks for taking our questions. For the initial tighten update, are you able to comment on how many patients you expect to have in the initial update and kind of what the follow-up would be?

Chip Clark

Yes. Thank you for the question, Colleen. We’re not going to provide specific numbers here, but obviously the goal is to make sure that our initial update provides, excuse me, as much as is realistically possible. A true sense of the activity that GEN-011 may be able to afford these very, very sick patients, and so I think we may be able to provide a little bit more guidance specifically on that as we get into the window.

Colleen Hanley

That makes sense. Thank you. And I know in this study you’re enrolling a broad range of solid tumors. Are there any indicators in the initial readout, what sort of tumor types will be included if there’s any that are enrolling faster?

Chip Clark

Tom, why don’t you handle Colleen’s question please?

Tom Davis

Sure. Colleen, as you pointed out, it is a basket study, but we have selected sites with particular strength in certain tumor types and as is, is coming in the space we’re focused on those that have been known to be responsive to checkpoint inhibitors, the tumor categories that the patients are refractory. Right now we’re not pointing to a specific indication that we would prioritize down the line that the study does allow for expansion cohorts, where we will be focusing in just specific histology.

Colleen Hanley

Great. Thank you. And then one last one on the data that you’ll have at SITC, some of the potential Inhibigen in autoimmune diseases. Just wondered if you had any comments you can share on that now and thoughts on development autoimmune diseases?

Chip Clark

Yes. Yes. It’s really interesting. Jess, why don’t you take that question, please?

Jessica Flechtner

Yes. Thank you for the question. We, as you know, since we showed that Inhibigen’s are deleterious in cancer, we wondered if they could also be beneficial in cases of autoimmunity, where you would want to drive that kind of immune response. And so the data that we will be presenting at SITC is very early, but it shows a role perhaps that these Inhibigen’s may play in dampening autoimmunity and so we’re really excited about these very early data.

Colleen Hanley

Great. Thanks so much for taking our questions.

Chip Clark

Thank you, Colleen.

Operator

There are no further question at this time. I would now like to turn the conference back to Chip Clark.

Chip Clark

Thank you, operator. And thanks again everyone for joining us today.

Operator

This concludes today’s conference call. Thank you for participating. You may now disconnect.

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