Q4 2023 Precigen Inc Earnings Call

Participants

Steven Harasym; VP, Head of IR; Percigen, Inc.

Helen Sabzevari; President & CEO; Percigen, Inc.

Harry Thomasian; CFO; Precigen, Inc.

Jim Shaffer; SVP, Head of Commercial Operations; Precigen, Inc.

Jason Butler; Analyst; JMP Securities LLC

Jennifer Kim; Analyst; Cantor Fitzgerald & Co.

Swayampakula Ramakanth; Analyst; H.C. Wainwright & Co., LLC

Briian Cheng; Analyst; J.P. Morgan Securities LLC

Presentation

Operator

Good afternoon, and welcome to the Precigen Full Year 2020 Financial Results and Update Call. (Operator Instructions) Please note that this event is being recorded.
I would now like to turn the conference over to Steve Harasym, Vice President of Investor Relations.
Please go ahead. Excuse me, Mr. Steve Harrison. (technical difficulty)

Steven Harasym

Thank you and I apologize for any technical difficulty here. Again, welcome to our 2023 full year financial call. With me is our CEO, Helen Sabzevari; CFO Harry Thomasian; and Jim Shaffer. Please refer to our most recent filings for our forward-looking statements.
With that, I'll turn the call over to Helen. Thank you.

Helen Sabzevari

Thank you, Steve, and thank you to everyone for joining us. And again, apologies for the little bit of technical and problems, but I think we are going through a very, very transformative year. 2024 is poised to be a transformational year for price suggests we are on track to present a pivotal Phase two data for our lead asset PRGN. 2012 in Q2 and intend on submitting our BLA in the second half of 2024. This is due in part to the positive guidance and pathway provided by the FDA and two, the tireless work done by our team over the last several years, starting from discovery in 2020, all the way to the potential filings in 2024.
For today's call, I will focus on our agile work platform, and we are working rapidly and prudently to advance. Our obviously are also at heart and asset, and we are looking forward to the data readout later on this year for Ultra CAR platform as we outlined in today's press release.
So for today, let me just jumping to adding the West platform, why we are excited about this platform and our lead assay that it pays off. For those of you who might not be familiar with this platform. It is a very differentiated platform from the rest of the wireless platforms. Why do I say that it's very simple. First of all, this platform is built based on the library of the Gorilla adenovector is, as you know, factors are not unlike other US banks. First of all, they have a high capacity that you can put number of genes in. But more importantly, they have the ability because there is no pre immunity in humans or very little you can keep dosing this with this vector with all of the lag of Maxtor's when you dose once or twice, you're getting this neutralizing antibody was eventually inhibited and responsive. And then after a while. You are just shooting a blend, that's one of the major issues in the vectors, other vectors and other platform services. And on the other hand, because we don't have premium to do today, you can keep on giving and because of the design of these factors on the specific in biological nature of the vector now, even when there is a neutralizing antibody kept at bay and does it enhances Why do I say that we have a clinical data actually from in various indications that you can be dosing the patient and we have dosed some of the patients up to 18 times. And not only you have kept enhancing the immune responses, but you have kept the neutralizing antibody uptake. And finally, one other aspect of the platform, which is very important there is this specialized manufacturing process, which allows high titers. And you can imagine that becomes very important, especially in commercial manufacturing process.
So let's dive into our lead asset, which is our PRGN. 2000. But again, 2012 has been designed to identify the assets of HPV. six and 11 and target cells that are infected with this virus. Why is that important in a rare disease of basically RRP or recurrent respiratory papilloma ptosis, the root cause of the disease is the infection, HPV. six and 11 infections in these patients, which then causes these benign tumors under local court or in the trachea of this pitch. Therefore, they can't talk or they can breathe for both these patients. Would that change?
I've gone through the devastating disease with really no treatment except surgery. What does surgery do if removing the benign tumor like male, you're correct and then they keep coming back. And as a result, the patient, first of all, if that was the situation, there is a danger and there is a continuous problem that you have not solved in order to really address this disease. You have to get to the root, which means what means that you have to address the infection underlying HPB. six and 11. And this is exactly what we designed TRG in 2012 to do two of Vacon. The immune responses of these patients to identify the cells that are infected and cause the benign tumors to go and dense to destroy them. And based on that, what we have done, it look at the notion of the patient in United States, there are estimates between 15 to 20,000 patients. Ex-us, you are looking at excess of 125 times the page. So as we mentioned this is truly a devastating disease with no current treatment when we started our trial with PRGM. 20 well, we first of all design the trial that the patient. We have the history of the patient in 12 months prior to receiving their vaccine and then the patients, they received a course of four vaccination with an 85 day. And then after that, we have been following the patient to see for the recurrence of this benign tumor in a statement on Phase one pivotal trial that we run for you generally what we the first of all, from a safety perspective, these patients have a very favorable state, mainly Grade one grade two, which is Tom Rogers at the site of injection for Stone. And Steve, I under it resolved within a day or two, very similar to the flu shot thinking.
Okay.
Secondly, one thing that was very specific about design for this vaccine that is given subcutaneously in the arm or leg?
Again, similar to the flu shot, we don't require any kind of a device. They don't require anything it can be done in any offer of any of the traditional freight.
So now what this top-up besides the safety and the endpoints that we had put, we decided to go to the most severe patient population. What do we mean by that? We define that and our KOLs and investigators have defined that as patients that at least require three surgery in a prior year. Actually, the average number of surgeries that our patients had enrolled was upwards of six surgery per year. So you can imagine at least a couple of months, this patient had surgeons, some of them. They have Touch Surgery Enterprise via what we observe one after the follow up of 12 months, 50% of the patients did not require. And so we refer to them as a complete responder. If we look at overall patient population that they reduce the number of surgeries, we are looking at 83% response rate.
Okay. Now when we look at the immunological responses of these patients, the patients that they had, the complete response, they have a significant increase in the immune responses to HPV six and 11 and this is exactly what the mechanism of the vaccine is all the above. At the same token, one thing that we have to say we have been following now these patients for more than 12 months. Actually, the patients are in full response and they are upwards of 24 months. This is two years after vaccination. And again, I'm going to stress severe patient population with the average number of surgery mean average base. So when we look at also the based on the data, the safety, the efficacy, the SBA last year for the first time in the history of any company. It has given us a breakthrough designation as well as accelerated path and agreed set of signal on pivotal Phase one data, not a single arm Phase two, which we had a target. And as at Pivotal and based on that, we can submit a BLA. So as we have mentioned last year, we finished enrollment to our Phase two, and we are really excited that we will be presenting the full dataset of our Phase two by the end of Q2. We already have published in Science, translational, our complete Phase one data and the mechanism of action of that as we all post to submit our BLA in the second half of the year. And we have received an agreement and the SPA that we have a rolling BLA. So as you can imagine, this is quite exciting and also a proof of concept for this platform. Simultaneously, we have been advancing another molecule PRGN-2009 and that I've been our Ready position in HTV. 16 and 18 cancer, but the neck cancer cervical cancer and the Phase two studies in Henan. It had been initiated last year, and we are currently enrolling and recruiting patients to this off well, seven, Nick, with the early onset of the disease, and this is quite exciting. Why? Because when you look at head and neck, the response rate of the patient even to that checkpoint inhibitor has been 18. So there is a wide gap here for improvement last year at Asco, we show that when we treat the HPV-related cancer patients, these are paid for patient these patients. But basically we had 30% objective responses, partial responses, complete responses and complete responses. It was billable. We had over a year, for instance, now response in some of these patients. This is in a patient population that I stress they get checkpoint inhibitor in cervical cancer, that 15% and then they sell for in head and neck, 18%. So now positioning PRGN-2009 in a head and neck in combination with pembro in an early onset. It's quite exciting time. This trial is recruiting and we have enrolled patients to date simultaneously. We moved this asset towards the cervical cancer last year. We received.
And finally, and the approval from SBA, we opened a Phase two study in combination with pembro in a relapse metastatic cervical cancer patient. And currently, as we speak, we are recruiting to this trial. And this is quite exciting. As you can imagine, this platform with the differentiation that it has from all the other platforms with the efficacy that has shown and in our lead PR, Jan 2012. But based on its safety clinical efficacy and also in discussions with the KOL and investigators, we have high excitement about this molecule for this rare disease because of ease of administration because of efficacy of clinical response and the durability of response has generated a lot of excitement and really have positioned us to become a leader in and treatments for this rare disease.
So with that as a highlight, I would like to now actually transfer to Harry Thomasian to give us a CFO update on our financials. Harry?

Harry Thomasian

Thank you, Helen, and good afternoon to those on this call. We appreciate you participating. As Helen mentioned earlier, 2024 is shaping up to be a transformative year for Precigen. We are all well on our way to completion of our drug substance manufacturing facility here in Germantown, Maryland and with the hiring of our head of commercial operations in September of this past year, we are continuing to build out our commercial function and plan to be ready for the expected launch of PRGN. 2012 in 2025. In addition, we anticipate that there will be multiple value inflection points in 2024, starting with our data readout on PRGN. 2012 in the second quarter of this year. As we approach the end of the first quarter of fiscal 24, we're continuing to exercise sound financial management, preparing for the planned launch of PRGN. 2012 in 2025 and continuing to move our other programs rapidly through the clinic, all while maintaining efficient SG&A operations.
So with that in mind, I'd like to spend a few minutes highlighting certain aspects of our financial results for 2023. In 2023, our research and development expenses were $48.6 million, an increase of 3% or $1.4 million from the prior year. This was primarily due to additional investment in our personnel, mostly through adding additional headcount to support the growth in the Company's development activities.
Our continued focus on SG&A costs resulted in a decrease of 16% for $7.6 million from the prior year to $40.4 million for the full year of 2023. This was due primarily to reduced legal and insurance costs and was achieved while we began to build out our commercial group. We filed our 10 K with the SEC just prior to this call, and you can find more detailed financial information in the financial statements, which are included in the 10 K. In addition, we are continuing to evaluate various opportunities in our current and are confident in our ability to strengthen our balance sheet as we approach the planned launch of PRGN. 2012 and transitioning from a clinical to a commercial stage company.
This concludes our prepared remarks for today. I'll now turn it over to the operator for any questions. Thank you.

Question and Answer Session

Operator

(Operator Instructions) Jennifer Kim, Cantor Fitzgerald. Jennifer, for line dropped.
Jason Butler, Citizens GMP.

Jason Butler

Hi. Thanks for taking the questions. And congrats on all the progress to the two from me. First of all, in terms of the PRGN. 2012 Phase two trial, can you maybe just compare the trial design here, patient population, anything about trial conduct to the Phase one study that we really have the data from and no, any differences?
And secondly, Helen, at this point, any more color you can give us on the design of a confirmatory study that you would conduct for for 2012 assuming you got accelerated approval.
Thank you.

Helen Sabzevari

Hi, guys, and thank you. Excellent question. So in regard to the Phase one and Phase two study, actually the design is exactly the same. And this is why FDA has allowed us to combine the phase one, single-arm and Phase two, single-arm and consider that as a pivotal. So we are really excited about that. There was no and different and different design between the two and it will total a 35 patient could have that there and data will be reported on in regard to the confirmatory trial. Also, we have the full agreement with the FDA already that the confirmatory trial would exactly duplicate what we have done in a single-arm Phase one and Phase two. So it's the exact same design. However, one interesting point here and I think it's very, very important is that based on the safety and the efficacy that we showed and the FDA has seen that data FDA has recommended, but we also consider and on this is not a requirement for the confirmatory. This can be separated or get done differently, however, or we can even add it to the confirmatory trial if we wish to, but for repeat dosing, because the consideration that does a the other 50% of the patient that they didn't go to a complete response, however, they benefited and they reduce the number of surgery, they might be able to go what the complete response. And we are really excited about that. We already have the design of confirmatory based on what we had designed before. And clearly upon our BLA submission for confirmatory trials will start going to be initiated the final thing.

Operator

Jennifer Kim, Cantor Fitzgerald. .

Jennifer Kim

Can you hear me?

Helen Sabzevari

Yes. Hi, Jennifer.

Jennifer Kim

Perfect. Sorry about the floor on. Maybe just start off, have you decided on your plan in terms of the format or venue for presenting the Phase two data? And then my second question is just from a commercial readiness standpoint, can you give more color on the manufacturing side and how much capacity do you anticipate having a timing of a potential launch? Thanks.

Helen Sabzevari

Absolutely. Thank you, Jennifer. So from the obviously, we are looking at the various options that we have and we will give a little bit more guidance as we get closer. But clearly we are looking forward and two are presenting the full set of data on our Phase two and our investigators also similarly. So we will be guiding.
And then two in regard to the commercial readiness and on a commercial facility. It actually is exactly moving according to the plan. And we will have a capacity that at the time of launch to meet not only the number of the patients. And actually we have by then have generated in the thousands of doses and that the patients can be treated with. So we are confident that we can meet the needs of the commercial and basically force and our patients as we move forward.

Jennifer Kim

Okay. That's helpful. And maybe to follow up on what you said before on SEEK or please to look at repeat dosing, is there any sort of data or feedback that you're waiting on and before you pull the trigger on making that decision?

Helen Sabzevari

No, actually, that is the arm that the design is has been up to us because that is not a requirement for a confirmatory from the FDA. Our confirmatory trial is already agreed by FDA, and it's actually in the process, as I mentioned, upon our submission of the BLA, we also have initiated that going forward. The repeat dosing is what we are the hub design in conjunction with our investigators and that we will also have as part of a confirmatory as another arm. But then again, that is not a requirement by the FDA. This is additional to expand our label and as well as expand the patient population that they can benefit. And from the peak dosing, especially with the durability that we see currently, which is more than two years.

Operator

Swayampakula Ramakanth, H.C. Wainwright.

Swayampakula Ramakanth

banking business, RK from H.C. Wainwright. Good afternoon, Arun. So I have one question on pitolisant all in terms of from commercializing the drug on, can you give us some sense some of the aspects of it in terms of like sales folks and what's sort of on what is the strategy there? And is it being an orphan disease to you on? I mean, do you focus on some specific centers where this is being traded on just some of the dynamics of that place. .

Helen Sabzevari

I'm going to ask Jim Shaffer Hea, of our commercial to actually give color to that.

Jim Shaffer

Thank you, Helen.. We have recently completed primary and secondary market research to better understand not only the patients, but also the physicians and the prescribers who currently manage the RP patients across the US. And what we continue to identify is that it's a relatively small group of specialty physicians, primarily layer colleges, which are a subspecialty of 80 physicians that are managing a large majority of patients. So we will be able to create hire and train a specialty sales team focused in the major metropolitan areas and very efficiently be able to increase awareness launch and promote our products, the what's group.

Swayampakula Ramakanth

Okay, thanks for that. And then going off onto the UltraCAR-T cell therapies on the three zero zero seven and they're on here during the dose escalation study. Now I'm hoping to present some preliminary data on board thoughts, what sort of data, what we see in terms of like the dose ranges and so on and how soon can you get into Phase two on based on what down I mean, what do you get to see from this this portion of the of this study?

Helen Sabzevari

Yes. No, I tend to focus. So in this trial actually based on our prior trials and we are still there is a two dose cohort here. However, this is an umbrella trial as we have mentioned before. And that basically means we are addressing a number of indications, both hematological as well as solid tumors, especially the triple negative breast cancer can be very exciting and what we are looking at the guidance that we have given, we will be giving some updates on the interim data by the end of 2024. And we will be moving upon the dose selection as well. Obviously, finishing all of the safety, again, the trial moves to the expansion phase Phase Ib. And again, those are the discussions that based on the data that we will see we will have with the regulatory body and this similar type of things that we currently have bid. For instance, RAML. which is in a patient population that they really have no other option in front of them. And as you are aware, other CAR-T and TCRs, I have not been able or even the off the shelf have not been able to insert in the gas arena and also a small molecule inhibitors, unfortunately address this. And only at certain percentage, 67% of the patients that they have those mutations, for instance, Inflectra. And as we have seen, based on the data of those patients, unfortunately, after a year also that there is a mutation in their tumors and they relapse and they have to look for other options. So I think we are really excited about that and are a party and the results that have been showing. And then we will be as we have given the guidance by the end of 2024, we will present the data on expansion.

Operator

Brian Cheng, JP Morgan.

Briian Cheng

Hey, guys. Thanks for taking our questions today. First one is on your first one is on the RPA scrap. Based on your market research, how should we think about the initial adoption trajectory within RP.? If you're approved today, if there are a lot of pent-up demand or do you think that this will be a small build over time type of launch? And I have a quick follow-up.

Helen Sabzevari

Thank you. Okay. I think, Brian, I'm going to let Jim Shaffer answers that I can add to that as well or Brian, thanks for the question.

Jim Shaffer

As I mentioned earlier, we recently completed a commercial market assessment for the U.S., the rest of world markets for our P. and IPRGN. 2012. We feel like the and overall uptake is going to be relatively swift because a large majority of the patients in our setting and managed by a relatively small number of Blair and geologists across the U.S. And so as we educate and increase awareness about the product availability, we think that's going to be relatively quick with those physicians and patients. So whether it's a V, another three or four year uptake curve to peak, and then with some level of re-treatment that occurs in it for the rest of the overall sales build over time. Does that answer your question?

Briian Cheng

Yes, it does. So on the maybe just on expenses, how should we project sales related expenses as you prepare for the launch? Any color on the projected cash runway? And and what is the latest update on the partnership for UltraCAR-T?

Helen Sabzevari

Okay. So I can take the sum of this and then definitely Harri can add to it. And in regard to As Harry mentioned, we are looking at the various strategies for and basically supplementing our financial balance sheet. And we are confident that we have been moved forward and we have that ability in regard to the Ultra CAR T actually, I'm glad you asked that question because as you can imagine, especially with there and evolution and that the scenarios that have happened, we saw all in the past six months, the change of the label, even in an approved CAR-T for the reason that the classical CAR-T, unfortunately, some of the patients have come down with them. Cancer is all associated with CAR-T and now that has to be projected in the label at the same token now It puts another cloud on the field of autoimmunity using the classical CAR-T because in a cancer patient, of course, you are dealing with it indication that the patients have no option and they have no other treatments on the other hand when you're looking at the chronic diseases such as lupus or autoimmunity, clearly now you have to have a very, very safe drug because number one, these are not patients that are Stage four, and these are patients that they can live for a long periods of time. And secondly, most probably they have to be redosed over their chronic disease. So you in that setting, you have to have two phenomena, number one, the state to ensure that someone that would have had otherwise along why you cannot be exposing to the scenario that they might develop cancer as a result of the treatment that they receive. Number two, it costs it becomes very, very important, especially in chronic diseases because as we can see currently even the cost in a cancer indication. It's not bearable on our system left alone. Now you go to the chronic diseases for those with the platform that we have developed and it's moving forward. And by the way, across the U.S. indication, we have now three, the more than 70 page in the plan. And number one, the ease of the manufacturing overnight at the hospital, which then does not require the costs that are associated, as you can imagine, with centralized manufacturing. And number two, the design of these CAR-Ts that we have currently which do carry safety switches within that with under if anything goes wrong, you can eliminate the cells. Thankfully, we have not to activate itself, but obviously, we have done all of the preclinical studies. And of course, these were part of our IND packages that was given to FDA. And I think this is an advantage that currently our CAR Ts, the combination of those two factors, obviously have created a lot of excitement and also Ascension. So we will be updating as we move forward in regard to our and then basically partnership activity but this is going to be a very exciting year for us.

Harry Thomasian

And Brian, I'll touch on your question around cash runway. So I'll start with the historical cash burn. So last year of 2023, our cash burn was about $68.5 million or an average of above $5.7 million per month. There will be some increased expenditures with the build-out of commercialization and manufacturing capabilities. But through financial management, we're trying to reduce spend in other areas of the Company.
I will go back to my prepared remarks and reiterate that we're continuing to evaluate various opportunities, and we are confident in our ability, strengthen our balance sheet as we approach the planned launch of PRG. in 2012.

Operator

(Operator Instructions)

Steven Harasym

I see no further questions left. Lester, let's turn it back to Helen for concluding remarks.

Helen Sabzevari

Thank you, operator, and thank you to all of those that joined us for our update call today. As you can see, 2024 is poised to be a transformative year for us at Precigen, especially as we transition from a clinical to a commercial outcome. The pivotal Phase two data are underway and a place to submit a BLA in the second half of this year. We are poised to deliver health to patient population with no alternative data and driving shareholder value and shareholder value. We look forward to communicating further in the coming weeks and months. Thank you again for joining.

Operator

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