Genocea Biosciences, Inc. (GNCA) CEO William Clark on Q4 2021 Results - Earnings Call Transcript

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Genocea Biosciences, Inc. (OTCPK:GNCA) Q4 2021 Earnings Conference Call March 10, 2022 8:30 AM ET

Company Participants

Daniel Ferry - LifeSci Advisors

William Clark - President, CEO & Director

Diantha Duvall - CFO & Secretary

Thomas Davis - Chief Medical Officer

Jessica Flechtner - Chief Scientific Officer

Conference Call Participants

Benjamin Burnett - Stifel, Nicolaus & Company

Colleen Kusy - Robert W. Baird & Co.

Gil Blum - Needham & Company

Joseph Pantginis - H.C. Wainwright & Co.

Operator

Good morning, and welcome to the Genocea Fourth Quarter 2021 Conference Call. [Operator Instructions]. Please be advised that this call is being recorded at the company's request. At this time, I'd like to turn the call over to Daniel Ferry of LifeSci Advisors. Please proceed.

Daniel 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. Joining 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; Jessica Flechtner, Genocea's Chief Scientific Officer; and Ray Stapleton, Chief Technology Officer, will then be available to answer your questions.

Before we begin, this presentation contains forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995, including statements related to GEN-011 and the anticipated timing of top line results from its Phase I/IIa clinical trial, the PLANET manufacturing process and research efforts, including with regard to ATLAS and Inhibigens. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Each forward-looking statement is subject to risks and uncertainties, and actual outcomes and results could differ materially from those projected in such statements. The forward-looking statements in this presentation speak only as of the original date of this presentation. 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 2020 annual report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission and available on Genocea's website. It is now my pleasure to pass the call over to Chip.

William Clark

Thanks, Dan, and thank you all for joining us today. I'm pleased to share Genocea's progress with you. Most notably, we recently revealed that we'll soon share initial results from our TITAN clinical trial for GEN-011, which is our neoantigen-targeted peripheral T cell therapy product candidate. Let me remind the audience that GEN-011 is comprised of neoantigen-specific peripherally derived T cells or NPTs, that we screen for patient-specific neoantigens with our ATLAS platform. The platform identifies through a bioassay, each patient's anti-tumor neoantigens and pro-tumor Inhibigens. Our PLANET process selectively expands T cells specific to the ATLAS identified antitumor neoantigens.

As of March 3, we had completed screening 23 patient samples with ATLAS. On average, across these samples, ATLAS has prioritized 12 neoantigens with an average -- a range rather of 0 to 43 and identified 16 Inhibigens with a range of 1 to 82 across the patients. From there, 17 patient samples have entered the PLANET process. 100% have either successfully yielded a released drug product, 14; or continue in process, 3. Of the 14 manufactured GEN-011 drug products, 6 have been administered to patients across both the multidose and single-dose cohorts with the remaining 8 available for dosing upon patient need. We expect to share initial data principally from the first 5 patients in the poster presentation at AACR.

We will also present 2 other posters at AACR. One will provide additional color on the GEN-011 PLANET manufacturing process and drug product characteristics. The other will showcase the continued evolution of the Inhibigen story made possible by the neoantigen selection capabilities of ATLAS. Finally, we are planning to host an investor call during AACR covering all 3 presentations. We will announce the exact timing shortly.

I'm also pleased to welcome John Lunger, Chief Patient Supply Officer at Adaptimmune to our Board of Directors. As the adage goes, processes product. So with successful scale-up and delivery of our drug product candidates, a critical driver of long-term success, I am confident John's experiences and expertise will prove invaluable to us and our Board.

I also would like to remind you that in January, we entered into an R&D collaboration and option agreement with Janssen Biotech, Inc., one of the Janssen Pharmaceutical companies of Johnson & Johnson, to explore the immunogenicity of neoantigens and the impact of Inhibigens in the context of vaccine therapies for cancer.

So as you can see, we continue to make progress on multiple fronts. I am grateful to the Genocea team for many things, including their heart, tenacity and agility. 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 $37.1 million of cash and cash equivalents compared with $79.8 million at December 31, 2020. Our operating results for the quarter ended December 31, 2021 are as follows. Our net loss for the 3 months ended December 31 was 13 -- December 31, 2021, was $13.3 million compared to $15 million for the same period in 2020. Our net loss for the year ended December 31, 2021, was $33.2 million compared to $43.7 million for the same period in 2020. R&D expenses for the 3 months ended December 31, 2021, were $10.3 million compared to $7.8 million for the same period in 2020. R&D expenses for the year ended December 31, 2021, were $39 million compared to $34 million for the same period in 2020. The increases in R&D expenses for the quarter ended December 31, 2021, is mainly due to GEN-011 manufacturing and clinical costs partially offset by a nonrecurring payroll tax credit. The increase in R&D expenses for the year ended December 31, 2021, is mainly due to GEN-011 manufacturing and clinical costs, headcount-related costs, partially offset by facility-related costs.

G&A expenses for the quarter ended December 31, 2021, were $3.1 million compared to $3.9 million for the same period in 2020. G&A expenses for the year ended December 31, 2021, were $14.7 million compared to $14.4 million for the same period in 2020. The decrease in G&A expenses for the quarter ended December 31, 2021, is mainly due to a decrease in professional services. The increase in G&A expenses for the year ended December 31, 2021, is mainly due to a growth in our internal G&A team, partially offset by decreased facility-related costs.

Other income for the quarter ended December 31, 2021 was $0.1 million compared to other expense of $3.3 million for the same period in 2020. Other income for the year ended December 31, 2021 was $18.9 million compared to $3.3 million for the same period in 2020. The increase in other income for both periods is mainly due to the noncash impact of the fair-value adjustment for our liability-classified warrants. Genocea's existing cash is sufficient to support our current operations into Q3 2022. However, we have strategic plans to extend our operations into 2023. With that, let's now open up the call for questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions]. Our first question comes from Ben Burnett of Stifel.

Benjamin Burnett

I guess first question, you mentioned 5 patients of data could be expected at AACR. These 6 have been dosed. Is there a chance that we could see some -- an update for the 6 patients as well?

William Clark

Ben, thanks for the question. I think we may have safety and tolerability data, but it will be too early to have a clinical sense of the impact on the tumor.

Benjamin Burnett

Okay. Understood. And I'd also just like to hear your view -- like what's the bar for efficacy in these 2 different cohorts? I think you've talked about in the past that there's a potential for these cohorts to enroll slightly different patient populations in terms of disease severity, do you see or view the bar for success is also being different between the 2 cohorts?

William Clark

Yes. Thanks for the question, Ben. I'll ask Tom to frame the rationale for the 2 dosing cohorts and then how we think about potential success.

Thomas Davis

Thanks, Chip. Obviously, a good question. As you are aware, the regimen that these patients generally receive, particularly if they're receiving TIL, is a complex combination of lymphodepletion, cell infusion and IL-2. Many patients are unable to tolerate that regimen and knowing in the design of our study that some of these patients may not be eligible for the full course, we allowed for a less intense regimen, which is the multi low-dose arm. If we see any activity in that multi low-dose arm, I think it will be very exciting, essentially because there are many patients, again, who don't have the capacity to tolerate the full TIL regimen.

However, the TIL regimen and any adjustments in dosing along the way, should all give us a sense of the potential for this treatment. And as we give the full TIL regimen, which is the intent, we would expect to see full potency in that setting. And hopefully, we'll see a good range of tumor responses. This is an early data set, of course. So you are going to be seeing just the initial patients who were treated.

Benjamin Burnett

Okay. Understood. That's helpful.

Operator

Our next question comes from Colleen Kusy of Baird.

Colleen Kusy

Great. Congrats on all the progress. So for the 5 patients that you'll have data on, are you able to say at this point what tumor types they have? And if you can't say that, could you indicate whether there might be multiple of one tumor type?

William Clark

Thanks, Colleen, for the question. We'll share all of that in more detail, of course, in about a month but it will be multiple tumor types.

Colleen Kusy

Okay. Great. And how long of a follow-up can we expect from the updated AACR?

William Clark

Yes. Tom, why don't you handle that, please?

Thomas Davis

Well, we have been dosing patients now for some time. So there will be the durability in those patients over time, but it's really the initial response that's going to be most important. And remember that the key hurdles with these cell therapies stretches across the spectrum from safe infusion to proliferation of resistance of the cells in patients, which really can define the future. So there is a good amount of data that we'll be able to share that will give you a sense of the potential for GEN-011.

Colleen Kusy

Okay. Great. That's helpful. And the delta between the 23 samples that you've run for ATLAS and the 17 manufacturing runs, I guess can you speak to that? Are there -- have those just not started yet? Or is the -- is that for some other reason?

William Clark

Yes. Probably I'll have Jess handle that question, please.

Jessica Flechtner

Yes, there -- it's all of the above. So your question is very astute. We have several that have been screened and are in process and going forward into manufacturing. We have some where the screens have happened, but the patients have either chosen to withdraw consent or did not move forward in the study. And so it's a combination of factors.

Colleen Kusy

Okay. That's helpful. And last question. Can you just remind us what the protocol is for when these patients are dosed in terms of their disease state? I guess is it possible these patients could be in different disease state or will they all have kind of progressing tumors when they get dosed with GEN-011?

William Clark

That's a question for you, Tom.

Thomas Davis

Thanks, Chip. So we do have a manufacturing period and the patients are selected when they've defined themselves as being refractory, but we then maintain them on bridging regimen or some other chemotherapy, if necessary, before we ultimately dose. So the short answer is it will be a mixture of patients with a different stage of disease. Some of these patients will have received multiple prior therapies and others will be newly refractory.

Operator

Our next question comes from Gil Blum of Needham & Company.

Gil Blum

Thanks for the update, and I think news coming up at AACR. Maybe another questionable question. So I mean we're going to see data from 5 patients. I'm assuming we're going to look at some tumor responses. But considering you do have some tissue from these patients, are we going to discuss any biomarker data, things like tumor-infiltrating lymphocytes and original tissues, things like that?

William Clark

Gil, thanks for the question. Jess, would you characterize what we'll likely see?

Jessica Flechtner

Yes. So we will be presenting some biomarker data. We have some work ongoing, looking at proliferation and persistence or phenotype of the cells in the periphery. We have some serum biomarkers that we may be able to include. We do have work ongoing to look at TCR sequencing and tumor infiltration. I can't point you to the availability of the data for that presentation but it is data that we are generating and we should anticipate.

Operator

Our next question comes from Joe Pantginis of H.C. Wainwright.

Joseph Pantginis

I want to see if I can frame this question the right way, a little more about the rationale about the 2 dosing cohorts. So I guess when you look at you call it cohort 1 without lymphodepletion in the multiple fractional doses, I guess, your internal rationale or data to support these lower doses over time that you can get sort of an efficient antigenic load to yield, say, an effective Th1 response while still potentially having regulatory T cells around since you're not lymphodepleting.

William Clark

Yes. Thanks, Joe. I'm going to speak -- have Tom, rather, speak to that.

Thomas Davis

Well, obviously, Joe, the biology is complex, but we certainly know that you can generate effective immune responses, and with more circulating cells in the periphery, you should be able to control disease. But the main message, as I emphasized before, is that we would like to have some way where we could dose patients who perhaps have more advanced disease or otherwise compromising their functioning. And this regimen would provide limited toxicity and, hence, would be a good opportunity to test. It would be a breakthrough, as I've said before, if we could provide a friendlier, less intense regimen for patients. But also being able to show activity of the cells and showing that they are able to penetrate the tumor and induce responses is the key question.

But I do recall, while we have the 2 cohorts that lower dose, the multi low-dose arm, really is intended for the patients who simply can't take the high dose. And our goal ultimately would be to dose as many patients as we can with the full TIL-type regimen.

Joseph Pantginis

Got it. And I appreciate the color, Tom. So I guess, I think the answer Chip is going to be, we'll see it next month. But of the 5 patients and even additional patients for safety and tolerability, well, can you share the breakdown of these 5 patients now as to which cohorts they are in?

William Clark

Yes. Joe, the first two patients per protocol were in that first cohort and the next 3 are in the second cohort.

Joseph Pantginis

Got it. Got it. And I guess just briefly sort of 2 parts but separate -- independent though. A little bit of a teaser with regard to the operational update that Diantha provided and strategic plans to potentially extend the runway. So obviously, there's a couple -- a bit of a spectrum there with regard to plans, I guess. Is one able to deduce that there's maybe some potential nondilutive types of arrangements, hopefully, in discussion?

William Clark

There are lots of discussions on a variety of fronts. And so we're not going to specifically tip our hand in this conversation about the ways in which we might address that particular transition.

Joseph Pantginis

Of course, of course. And then I would be remiss if I just didn't ask separately. Is there any sort of -- other than a status quo right now as to how GEN-009 is going with sort of potential enrollment and follow-up?

William Clark

Yes. No, that's -- it's -- we continue with long-term follow-up and hope to be able to share an update on that in the near future.

Operator

I'm showing no further questions at this time. I'd like to turn the call back over to Chip Clark for any closing remarks.

William Clark

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

Operator

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.

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