Achilles Therapeutics plc (ACHL) CEO Iraj Ali on SITC & Corporate Update Call (Transcript)

Achilles Therapeutics plc (NASDAQ:ACHL) SITC & Corporate Update Call November 12, 2021 8:30 AM ET

Company Participants

Lee Stern - VP, IR & External Communications

Iraj Ali - CEO

Karl Peggs - CMO

Sergio Quezada - CSO

Samra Turajlic - Chief Investigator, THETIS

Conference Call Participants

Joe Catanzaro - Piper Sandler

Tazeen Ahmad - Bank of America

Ingrid Gafanhao - Kempen

Lee Stern

We are glad you joined us for our review of today's SITC presentations and a brief corporate update. Prior to this call we issued a press release and posted a slide presentation that can be found on our website at www.achillestx.com. We will refer to this during our prepared remarks.

On today's call we have the pleasure of being joined by Dr. Samra Turajlic of the Royal Marsden's NHS Foundation Trust. Dr. Turajlic is the Chief Investigator of our THETIS clinical trial. In addition from Achilles, I am joined by Iraj Ali, our Chief Executive Officer; Karl Peggs, our Chief Medical Officer; and Sergio Quezada, our Chief Scientific Officer.

Before we start, I would like to remind everybody that today's statements will include forward-looking statements that are based on management's beliefs and assumptions and on currently available information.

Although we believe that the expectations reflected in these statements are reasonable, they relate to future events, future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.

The forward-looking statements on this call represent our views as of today, November 12, 2021, and we encourage you to review our SEC filings regarding specific risks and uncertainties.

With that I will turn the call over to Dr. Iraj Ali, CEO of Achilles.

Iraj Ali

Thank you, Lee, and welcome, everybody. The main purpose of this call is to review our two SITC presentations highlighting updates from our ongoing Phase 1/2 clinical trials and our VELOS manufacturing process. However, since it's the first Achilles conference call since our IPO earlier this year, I wanted to just take a few minutes to review the Company, our technology and our pipeline for those of you that may be new to the story.

I encourage you to review more details on our website. Given the time constraints of the call I will focus on where we feel Achilles is differentiated and why we believe we can improve and extend the lives of patients suffering from the solid tumor cancers.

Achilles is a clinical stage company developing precision T cell or precision TIL therapy to treat solid tumors and as you may see on our current slide 4. Our science is based on pioneering research from the field of tumor evolution led by one of our founders, Professor Charlie Swanton, who was able to show in his landmark TRACERx study that cancers are clonal in origin and actually start from a single cell that develops in a Darwinian fashion.

Using our proprietary technology we can identify the mutations that originated early in tumor evolution that formed in that original cell and are now, even years later, present on all cells in the tumor. These clonal neo-antigens are not present on healthy tissue and, for the first time, offer an exquisitely specific target class for the solid tumors. We've elected to go after these targets using a TIL based approach, which we believe has demonstrated impressive clinical results in the late-stage metastatic setting.

On slide 5 we show how we bring together the cutting-edge genomics of tumor evolution with a TIL based therapy to target all tumor cells in the body while sparing healthy tissue. We procure tumor and blood from the patient and perform a genomic analysis using our PELEUS platform. This identifies the unique clonal neoantigens specific to that patient's cancer which are then manufactured as synthetic peptides.

From the patient's blood we can manufacture dendritic cells, which are loaded with the clonal neoantigen peptides and mixed with the T cells harvested from the tumor. The dendritic cells can now find and activate T cells that are reactive to the clonal neoantigens, which is typically only a small fraction of the T cells coming out of the tumor. These reactive T cells are then expanded to become a clonal neoantigen-reactive T cell or cNeT product.

There are important advantages of using this natural T cell selection and expansion process. First, we are able to manufacture a more naturally fit and potent T cell because we do not require the very high levels of stimulatory cytokines needed in standard TIL therapy and we can -- that can lead to T cell exhaustion.

Secondly, our system is not reliant on antigen prediction technology. We don't need to select our favorite 20 neoantigens and we are able to include all the clonal neoantigens predicted by our PELEUS platform, which is typically about 100 unique peptides. Our process lets the dendritic cell select a T cell in a natural process. Together this allows us to manufacture a highly fit and polyclonal T cell product that is able to target multiple cancer antigens present on all tumor cells and absent from healthy tissue.

Our approach is built on targeting a novel class of antigen which we believe has real potential to unlock transformational efficacy in the solid tumors. And I wanted to say a few words about TRACERx and our unique capability in this space detailed on slide 7.

We have exclusive commercial access to the TRACERx study which we believe to be a unique asset in the field. The study has been running for over five years and recruited over 780 non-small cell lung cancer patients, collecting a very extensive database of clinical and genomic data, including over 3,000 sequenced and analyze tumor samples. It is from TRACERx that we have built our world leading and unique capability in neoantigen prediction.

We believe this is a pan cancer approach and are confident that our platform can find numerous clonal neoantigen targets across multiple solid tumor indications supporting a deep pipeline of solid tumors.

Today, we're talking about data from the first eight patients, which were dosed at the lower end of our target range, where we've been able to show detailed product characterization and tracking of our cNeTs that demonstrates the strength of our analytical platform. We have also elected to move to Process 2 starting with dosing in the first half of 2022, which we anticipate will more reliably reach our predicted therapeutic dose levels and we expect to improve on the results seen thus far.

Together this all supports our view that the combination of the best targets, clonal neoantigens, with a best-in-class technology platform will deliver the strongest pipeline in the solid tumor cell therapy field.

With that it's my pleasure to hand over to Dr. Samra Turajlic to review the highlights from her SITC presentation.

Samra Turajlic

Thank you very much, Iraj. I'm delighted to have the opportunity to present the early clinical data for the first time from the ongoing CHIRON and THETIS trials. And as you know, in spite of the success of immuno-oncology therapies, especially in the last decade, there remains a significant clinical need for novel approaches and combinations, and this is especially true for patients with solid cancer that is refractory to immuno-oncology approaches.

In the results starting with the full poster on slide 18, you will see current data reflects our first-in-human experience dosing, as Iraj said, at the lower end of the cNeT dose range that will be explored during these studies. Note that slides 19 through 22 include some selections from the posters, so this is easier to see in this format.

As with all first-in-human studies, the aim is to demonstrate the tolerable safety profile coupled with a deeper understanding of the biology driving desired outcomes, which encompasses both cell engraftment and clinical efficacy. As expected from inclusion criteria, the patients represented here are heavily pretreated cohort.

We are encouraged by the early findings both in terms of the manageable toxicity profile and the ability to detect and track cNeT in a proportion of patients following infusion. We have used a lower dose of interleukin 2 following cell doses than is used with unselected TIL, and encouragingly saw none of the higher grade adverse events more commonly reported with the use of higher dose IL-2 regimens.

cNeT with reactivity against multiple individual patient specific neoantigen peptides are detected in seven of eight, or 88%, of cNeT product so far. In these seven products the range of individual reactivity is 2 to 28. Furthermore, cNeT was detected in the blood of five of seven, or 71%, of the patients receiving these seven products with detectable cNeT following infusion at time points up to six weeks post dosing.

Although no objective responses have been reported to date, some patients did experience periods of disease stability. Specifically five of eight, or 63%, of the dosed patients had the best response of stable disease in this initial low dose cohort generated using VELOS process 1. The encouraging data from this low dose cohort are important as they show how the Achilles platform can answer potency questions, give the first look at mechanisms of action in a TIL product and adds confidence to now move to higher cell doses.

As the experience broadens we hope to be able to unravel the mechanisms underpinning success using the translational science platforms which I presented during the conference. This will be the first time that such systematic analysis are performed across all patients receiving TIL based products, which I believe is fundamental to delivering maximum patient benefit.

Over the coming 12 months, I look forward to exploring high medium doses from VELOS Process 2 manufacturing that should more predictably be in the anticipated therapeutic range based on the work done with other cell therapies. As we move to high cNeT doses, I expect improved cell engraftment both in terms of peak expansion and durability, and hope to see greater evidence of antitumor activity.

As we open the combination cohort in the THETIS melanoma study, I'm also excited to see the impact of immune checkpoint inhibitors at both the basic translational science level and on antitumor activity.

I will remain on this call to take questions at the end and will turn the call over to Karl Peggs.

Karl Peggs

Thank you very much Samra. So, I think our view is that these early trial dates clearly demonstrate that we've developed a platform with capabilities that allow us to both define and quantify the active component of our drug product. Equally importantly, we can then follow the kinetics of cell expansion, engraftment and persistence following infusion, even with the low cNeT doses we have currently deployed to date.

And this really forms a platform to allow us to evaluate the parameters of either the infused product or the patient characteristics that ultimately correlate with both improved engraftment and clinical efficacy. And as Samra mentioned, this really allows us to understand what defines likely success of the TIL based therapy for the first time in this field.

As we move into the next phase of our clinical development through 2022, we are going to evaluate the impact of the increased doses of cNeT across both of our cohorts in lung cancer and melanoma and, as already indicated, the effective combination with checkpoint inhibitors specifically in the melanoma study.

The advances that we are able to progress in these areas are really underpinned by further advances in our underlying VELOS manufacturing platform.

So, I'll now turn the call over to Sergio to discuss these in more detail.

Sergio Quezada

Thank you, Carl. As just mentioned, we have shown the ability of our technology to define, characterize and quantify the active component of our drug product as well as to measure [engraftment] kinetics after patient dosing. The next step in development is to increase the [median seen at] dose to be more reliably within the anticipated therapeutic range. The results from our proof of concept work in the Achilles process development labs demonstrates how the VELOS Process 2 meets this goal.

Next, I want to point to a couple of important takeaways from the SITC presentation describing this data. The full poster is on slide 24 and, as before, the presentation includes specific selections from the poster.

First, it's important to note that VELOS Process 2 improves upon Process 1 by introducing additional culture media supplementation and an expansion boosting stimulation cocktail during the co-culture period. All of this is done without adding any time to the overall manufacturing process nor impacting cell thickness or phenotype.

Our proprietary potency has enabled us to identify the proportion of cNeTs within the overall T cell population in our products. This allows us to precisely quantify the dose of the active drug component. In both CD4 and CD8 positive T cells, similar proportions of cNeTs were detected with both processes. With the large increase in T cells generated from Process 2, the median cNeT dose, which is the active component of our product, was increased 18 fold compared to Process 1.

Further, our VELOS process has always generated polyclonal cNeT products. And encouragingly, Process 2 generated products with a median of fiber activity detected, which can be seen in the poster and on slide 26 of the presentation. In the four patient samples where both Process 1 and 2 were tested in parallel, Process 2 generated products with a higher number of reactivities. In this proof of concept study we will serve as many as 18 reactivities in one of the products.

Slide 27 shows that cells generated by Process 2 retain a similar phenotype to those generated by Process 1. The product contains both CD4 and CD8 positive cells and the majority of this bearing an effector memory phenotype. Upon restimulation with clonal neoantigen peptide pools and stained for cytokine secreting cells, we were able to determine the phenotype of the cNeT generated.

A similar proportion of cNeTs from Process 1 and 2 express immune checkpoint molecules can treat PD1, TIGIT and ICOS. Cells generated from both processes are also functionally similar. In response to polyclonal stimulus Process 1 and 2 generated cells able to produce similar amounts of inflammatory cytokines interferon gamma, interleukin-2 and TNF alpha illustrative of the fitness, specifically and potency maintained in the new Process 2 shown on slide 29.

To conclude on slide 30, Achilles' proprietary potency assay enables us to quantify cNeT dose. This has allowed us to optimize the VELOS process aiming to generate a greatly increase dose of cNeTs with Process 2. Achilles' suite of analysis and assays was used to confirm that the key markers of phenotype and cellular function were not adversely affected by these optimizations. This proof-of-concept data supports the transfer of VELOS Process 2 to clinical manufacture for use in Achilles clinical trials.

As was also mentioned in the press release, we will be presenting data from the GMP [runs] for Process 2 at the December ESMO immuno-oncology meeting. This GMP scale manufacturing is identical to the process for Achilles' clinical study and form the basis of the Company's regulatory submission to move the ongoing clinical study into Process 2.

Based on our experience with the other cellular therapies, we are confident that Process 2 will deliver a seamless dose within the anticipated therapeutic range.

Now, I will hand the call back to Iraj for some closing remarks.

Iraj Ali

Thanks, Sergio. The data we presented today continues to illustrate differentiated profile of our cNeT product and overall platform. What we have heard from Samra, Karl and Sergio shows that our proprietary VELOS manufacturing process builds on standard TIL therapy by leveraging clonal neoantigen targeting to deliver a more precise and potent product we believe will deliver the next generation of TIL therapy.

Further, with our platform we can quantify the cNeT reactivity and dose of each product, which can be used as both a release criterion and potency measure. We believe that the cNeT is the active component of TIL and will correlate with antitumor effect.

Being able to reliably detect and quantify our active component offers unique insights into the mechanism of action for a TIL based therapy for the very first time. This ability is a key differentiator of our world-class technology that is unique in the field and which we believe will be critical for the successful development of TIL-based therapies.

As we move through the balance of 2021 and into 2022, we look forward to delivering on the clinical milestones outlined on slide 34. We will present our GMP data from the VELOS Process 2 and file an IND this year in head and neck squamous cell carcinoma. We plan to share data updates at key meetings in 2022 as we dose those patients with the cNeTs generated from the Process 2 in both monotherapy and combination cohorts.

We also continue to scale up our manufacturing activities across our facilities. Finally, we reported in our third-quarter results this week with a September 30 cash balance of $282 million, which provides funding to complete the ongoing Phase 1/2a CHIRON and THETIS trials, initiate manufacturing scale out and the addition of other indications to the pipeline giving the Company a runway to continue to generate data and deliver value.

With that we can open up to questions. Operator?

Question-and-Answer Session

Operator

Joe Catanzaro, Piper Sandler.

Joe Catanzaro

Hey, guys, thanks so much for hosting this and thanks for taking my questions here. Just a couple from me. I know patient numbers are still small. But based on some of the biomarker data you have and engraftment success, do you have a sense of where you’re heading and whether it’s more about absolute cNeT dose or more so percent cNeT reactivity within that T cell dose?

And then with Process 2, as you noted, an 18 fold increase in cNeTs. If my math is correct that gets you to about 250 million cNeTs if we use the early median dose from Process 1 clinical data? Do you think there’s more opportunity to get it consistently closer to 1 billion? And where do you think that could come from if that’s in fact what’s needed? Thanks.

A – Iraj Ali

Hi, Joe. Thanks for the questions. Good questions as always. If we start with the things that we see with small numbers, I think you’re asking the million dollar question at this time for Achilles and the field of T cells. And I think I will ask Karl to comment on that. And then I’ll briefly comment on your second question.

A – Karl Peggs

Yes, great question, Joe. So, you’re right, it is small numbers at the moment. And I think what we’ve tried to demonstrate is we have the platform to get to the answer that you want. So, two of the factors that look to be important would be absolute cell dose, as you infer, and percent reactivity of our product. And then beyond that obviously further phenotypic characterization of the cells that are actually coming in and things like the CD4/8 ratio.

Now at the moment, because the numbers are low, you can clearly see the polarity of the fact that the patient with the exceptionally low cNeT numbers, that we couldn’t delineate specific reactivity. That is one out of the eight we didn’t see engraftment in. So, that binary I guess was to be expected.

If the absolute number is too low you won’t see something. But we have yet to get a feel for where that absolute needs to be in order to see the best engraftment. And that’s really what we’ll get as we move to Process 2, large numbers of patients in a large number of the higher doses.

The same is also true of the issue around reactivity. Early hints that, yes, a more reactive product in terms of percentage reactivity in those small early numbers does look to a couple – to a higher likelihood of [indiscernible] engraftment. So, I think these are the things that we’re tracking going forward and, as I said, really we have a platform now to dissect them and get to those answers that you want.

A – Iraj Ali

I think to question two, which is sort of briefly can we get to 1 billion cNeTs. I think there are two points to that. The first is we’ve got to be led by the science here, so that’s why we think the ability to precisely quantify the tumor reactive component, as we have shown in the poster today, and the ability to track it in the patient is going to be critical to unravel how important and what dose we need.

I think the second part of that question is in short, yes, we can. We believe there are many more tools in the armory to keep pushing the cNeT dose up. At a certain point you’re probably going to be making trade-offs with T cell phenotype, which may or may not be relevant to clinical activity. And you can go in that direction if that’s what the clinical data tells you.

And I’ll let Sergio comment on a number of the things that we’re looking at that we could use should the clinical data tell us it’s the right thing to do to move the dose further up.

A – Sergio Quezada

Yes, we have a suite of potential modifications or levels, if you want to call it that way, that we can enact to start increasing the dose. But as Iraj mentioned, we will only enact on those if the clinical data is telling us. And because we can measure and make correlations between active dose and clinical response, that’s what’s going to inform on how to proceed.

Operator

Tazeen Ahmad, Bank of America.

Tazeen Ahmad

Hi, good morning and good afternoon. Thanks for taking my question. Just one for me maybe, Iraj. Can you give us a sense – I mean, you set expectations for your study, your monotherapy study for melanoma. What would be good data there just given where you are in development now? And how are you going to make a decision on whether or not it makes sense to move forward for combination therapy?

A – Iraj Ali

Good question. So, I think in short what looks good in monotherapy melanoma, obviously we have a clear line of efficacy that you want to achieve and be set by the Iovance and Instil standard TIL therapy companies that we see convincingly around 30% to 35% OR rate, low CR rate.

So, you know where the bar is at of what you want to be if you want to be out there competing with these sort of products. What is a good look for us is obviously really a function of how many patients you’ve dosed.

So, in the early days what we really want to see is a correlation between our cNeT, the presence and expansion of cNeT in clinical activity. I think if we can see that early on then we believe we can optimize for that and ultimately we will want to push the OR and CR rates as high as possible. And theoretically those should – they should improve upon and exceed on standard TIL therapy. So that is part A.

Part B, what would make you want to open your checkpoint combo study, I think from a mechanistic and understanding of where our therapy is going to fit in the treatment paradigm, that’s something that we’re ready to open in the next few months subject to getting through our data safety review at the IDSMC which we plan to hold in Q1 of next year.

We think that, again, will answer another really important mechanistic question that we don’t still understand after really 20 years of TIL therapy. We don’t know what the contribution of checkpoint is to TIL therapy. We’ve shown you graphs that show T cell kinetics, expansion, persistence and then in most cases you see the T cells falling down again.

We want to know does a checkpoint inhibitor affect those kinetics or does it affect the clinical efficacy or does it affect both. So, we think that’s a critical question for the field and I think we are ready to answer that question as soon as the studies allow us to.

Operator

Mark Breidenbach, Oppenheimer.

Unidentified Analyst

Hi, guys. This is Matt on for Mark. Congrats on all the progress and thanks for taking our question. I wanted to ask with the new process and adding that new cocktail for expansion, have you seen any signs of decreased T cell exhaustion in your characterization of the process relative to Process 1? Thanks.

A – Iraj Ali

I will let Sergio pick that one up.

A – Sergio Quezada

Yes, so we run quite a large amount of comparisons and the short answer is no. When we looked at the expression of the different checkpoint molecules on the surface of the cell [indiscernible] with Process 2, they are very similar to those generated in Process 1.

One of the most important measures for us of functionality is the ability to secrete interferon gamma IL-2 and TNF alpha in which you measure the amount secreted on a per cell basis. So, how much can each cell produce. The levels are again very similar between Process 1 and Process 2. And the last measure that we take is sensitivity to IL-2. So, when cells become really exhausted they can’t sense very well IL-2, and the two processes generate cells with equal capacity to sense interleukin-2.

Operator

Eric Joseph, JPMorgan.

Unidentified Analyst

Hi, this is Hannah on for Eric. Thanks for taking the questions. Just a few from us. So, just wanted to get a sense of the overall success rate of cNeT manufacturing of Process 1 and maybe how that rate trended around the treatment of the two incremental patients that were enrolled in the study. And then just does Process 2 allow you to use lower levels of starting tumor cell and [indiscernible] material?

A – Iraj Ali

So, let me start with the question on Process 1 manufacturing, and I didn’t hear the second part of that. Sorry.

Unidentified Analyst

Just the overall success rate of the Process 1 manufacturing in terms of cNeT dose and how that rate trended around your treatment of the two incremental patients.

A – Iraj Ali

Okay, got it. So, we will be issuing an update on the manufacturing success rate of Process 1 and comparing to Process 2 likely in the first half of next year as we close that process out. So, we’d like to do that in a more comprehensive way. We’re not quite ready to release that data here, but we will do that. It’s broadly in line with what we have seen all along the journey with Process 1.

I will note that we believe that Process 2, albeit on the small number of experiments that we’ve run at GMP which we’ll be sharing at the ESMO I/O conference in December, appears to have a more robust manufacturing profile and we expect improvement [indiscernible] success rate.

And I think the second part of your question related to how are we able to use the lower numbers of starting TIL. I think it’s best that, Sergio, if you could comment on that.

A – Sergio Quezada

Yes, so the modifications in Process 2 include a new cocktail of cytokines that we’ve designed based on literature to recover higher numbers of TIL out the first part of the process. So, it’s not like we are working with less TILs, but it’s much more efficient to recover higher numbers of those TILs from the same amount of material. Does that answer the question?

Unidentified Analyst

Yes, it’s helpful. Thanks for answering the questions.

Operator

Ingrid Gafanhao, Kempen.

Ingrid Gafanhao

I was just curious, you didn't comment on that, but this Process 2 for the VELOS manufacturing increases your manufacturing time? And if I may, I have a follow-up after that?

Iraj Ali

Sure, I can answer that quickly. Process 2 has the exact same manufacturing time as Process 1.

Ingrid Gafanhao

Got it, thank you, Iraj. And just then a little bit curious more on regarding to the patients that you have treated so far. Have you been able to have access to their [indiscernible] samples after you treated them to just check and take a look if there is T cell infiltration there?

Iraj Ali

That's a great question. It's a very challenging situation to try and [indiscernible] or access tumor material post treatment. And I think Samra can tell you exactly what it's like on the front line.

Samra Turajlic

Sorry, can you just recap the question for me?

Ingrid Gafanhao

Yes, sure. I was wondering if you had access to tumor material from the patient after treatment? If you evaluate if there is seen an infiltration in tumor?

Samra Turajlic

Is the question whether this is feasible in patients?

Ingrid Gafanhao

Whether – do you see people and, if [yes], if you were able to do that already?

A – Samra Turajlic

For a disease like melanoma where the distribution of metastases is sometimes confined to sites that are easily accessible subcutaneous or cutaneous or other soft tissue sites, I think we have a higher chance of success and yield within that. It’s obviously very patient dependent. In terms of what analysis of such material tells us, and I will refer to Karl or Sergio to comment.

A – Karl Peggs

Yes, I think – this is Karl, it’s a great question. It’s the sort of thing that you – in an ideal world you would want to know not only if the cell is present in the blood, but what are they doing in the tumor. We haven’t mandated on protocol specific time points for biopsy.

We have written in that we would encourage biopsies where clinically appropriate where material is available. As Samra says, that will be highly variable, and where we think that it may be useful in understanding the underlying biology of what’s happening. In terms of the patients to date, we haven’t received any samples to do those analyses.

Operator

And we have no other questions in queue. I would now like to turn the conference over to management for closing remarks.

Iraj Ali

Thank you. And thank you, everyone, for joining us today. I hope we were able to put the SITC updates in context of the ongoing Phase 1/2 clinical trials in the larger context of delivering precision and commercially scalable cell therapies across multiple solid tumors.

We, of course, are attacking cancer's Achilles heel by going after the targets in early tumor evolution and present on all tumor cells absent from healthy tissue. We look forward to seeing many of you at the upcoming conferences and continuing to update you on our progress. Thank you.