Adicet Bio, Inc. (ACET) Earnings Call Transcript & Summary

Good morning and thank you all for joining us today. I'm Chen Schor, President and CEO of Adicet Bio. By now you've seen the press release we issued this morning announcing important updates for our lead asset, ADI-001. We're excited to share a corporate update today that we believe has the potential to unlock significant value for both patients and shareholders. Let's get right to it. As a reminder, we'll be making forward-looking statements today as detailed on the slide, including express or implied statements regarding ADI-001, our future plans and strategy and other statements that are not historical fact. Please also refer to the forward-looking statements from today's press release as well as the Risk Factors section in our most recent 10-K and subsequent SEC filings for more detail. This call is being recorded. On the call with me today are Dr. Francesco Galimi, Chief Medical Officer; Dr. Blake Aftab, Chief Scientific Officer; and Nick Harvey, Chief Financial Officer. We're excited to kick off 2024 with the goal of unlocking the promise of our strong and diversified pipeline of off-the-shelf engineered gamma delta CAR-T programs in cancer and now also in autoimmune diseases. As you saw in the press release we issued this morning, we announced important updates on our lead assets ADI-001. Currently, ADI-001 is being evaluated in an ongoing Phase I study for the potential treatment of relapsed or refractory B-cell non-Hodgkin lymphoma or NHL. Based on ADI-001, clinical data to date and its therapeutic potential in B-cell mediated diseases, we have decided to broaden its development to autoimmune diseases. To that end, the U.S. FDA recently cleared the IND application for ADI-001 in lupus nephritis, and we plan to initiate this clinical study in the upcoming second quarter. In addition to initiating development in lupus nephritis, we plan to expand the program in the near term to additional autoimmune indications. In today's update, we also announced our decision to focus on enrolling MCL patients to the ongoing Phase I study in NHL. As noted in our previous data update in June 2023, the MCL patient population saw the greatest clinical benefit to date following treatment with ADI-001. We believe this step will enable us to build on the favorable product profile observed in this patient population including the high complete response or CR rate, the favorable durability and safety profile, no significant risk of CRS and ICANS, lower risk of T-cell malignancies compared to autologous CAR-T and the potential to dose off the shelf in community setting, which should enable broader access to patients. These properties provide ADI-001 with significant differentiation and potential for best-in-class therapy for MCL patients. Additionally, we've been very diligent with our allocation of resources to streamline our programs and operations to deliver meaningful benefits to patients and shareholders. With that, we have updated our cash runway into the second half of '25, which provides Adicet optionality and multiple opportunities for significant milestones as we will outline in today's presentation. I'll now turn to discuss why we're excited about the potential of ADI-001 in autoimmune diseases. Let's go to the next slide. Considerable evidence from academic studies have shown profound and durable responses to autologous CAR-T therapies in patients suffering from severe refractory autoimmune diseases including systemic lupus erythematosus or SLE, systemic sclerosis and idiopathic inflammatory myopathy, 3 diseases. Clinical data from these academic studies demonstrated that depletion of B-cells causes a reset of the immune system that is disease modifying and allows patients to remain treatment-free across several autoimmune diseases. I would like to highlight that the B-cell depletion data from our ADI-001 in lymphoma on the left side of the slide in light blue mirrors the B-cell depletion of autologous CD19 CAR-T in lupus patients, we experienced robust efficacy from academic studies by et al. presented on the right side of the slide in the darker blue graph. This B-cell depletion profile of ADI-001 is also consistent with the profile presented by et al. in the American College of Rheumatology conference less than 2 months ago in November in 15 patients with lupus, systemic cirrhosis and idiopathic inflammatory myopathy, we experienced robust efficacy. These data are also consistent with ADI-001 being the first and only allogeneic cell therapy with Cmax and exposure by AUC or area under the curve that meets or exceeds data reported by approved autologous CD19 CAR-T as recently presented by Adicet at ASH last month. B-cell depletion via CD20 targeting is also supported by the long clinical experience with the anti-CD20 antibody rituximab. And by the recent data with obinutuzumab, an anti-CD20 with enhanced pathotoxicity, which demonstrated compelling efficacy on top of standard of care in lupus nephritis in a Phase II clinical study. Let's go to the next slide. This slide summarizes the key reasons we believe ADI-001 has significant potential in autoimmune diseases. First, as I outlined, B-cell depletion from ADI-001 trial in patients, mirror B-cell depletion by autologous CD19 CAR-T in lupus, systemic sclerosis and idiopathic inflammatory myopathy. Second is the homing to tissues. The inability to deplete tissue resident B-cells in secondary lymphoid organs and other tissues has been reported as a contributing reason for the failure of targeted antibodies in lupus. A critical advantage of gamma delta 1 T-cells is their traffic to solid tissues. This property may be ideally suited to deplete B-cell mass located in peripheral tissues, including secondary lymphoid organs and kidneys, which may better enable an effective reset of the immune system. A highly desirable outcome for the treatment of autoimmune diseases. Third is safety. ADI-001 has shown to be well tolerated with no significant CRS, ICANS and lower risk of T-cell malignancies compared to autologous CAR-Ts. This profile in ADI-001, off-the-shelf availability makes it suitable for the treatment of autoimmune diseases and provides the potential to dose patients in the community setting. I'll now hand it over to Francesco to expand on the claim clinical design of the study and provide additional detail. Francesco.

Thank you, Chen, and thanks, everyone, for joining us this morning. As Chen covered previously, we are pleased to be expanding the development of our lead pipeline assets, ADI-001, into autoimmune diseases. Let me start by illustrating on Slide 8, the dose-finding Phase I trial design that we will initiate soon in lupus nephritis as a first indication. We will perform a 3 plus 3 dose escalation starting at 100 million CAR positive cells, flat dose, which we now provides compelling efficacy in our non-Hodgkin lymphoma trial. Subject to safety findings, higher doses will be explored up to 1 billion CAR positive cells. Before ADI-001 infusion, each patient will be conditioned with cyclophosphamide and fludarabine lymphodepletion. The dose limiting toxicity reporting window is set to 42 days, 6 weeks for this study. Safety events during this period will be driving those escalation decisions. The first efficacy assessment is scheduled on day 28 after infusion and then on months 3, 6, 9, 12, 18 and 24 thereafter. Once the maximum tolerated dose or maximum administered dose is determined, a dose expansion cohort will be opened to further characterize the safety and efficacy of ADI-001 in lupus nephritis patients. The next slide illustrates the endpoints of the study. Primary endpoints will be focused on safety, given this is a Phase I study. Preliminary efficacy will be measured starting on month 1 after infusion and will be centered on recovery of kidney function as a secondary endpoint. Additionally, cellular kinetics and a panel or relevant pharmacodynamic measures will also be monitored over time such as antinuclear antibodies, anti-double-stranded DNA antibodies and complement levels. Systemic lupus responses will also be measured as exploratory endpoints with a consolidated scoring system used in the clinic called SLEDAI-2K, which accounts for a broad panel of clinical assessments, including neurological, psychiatric, dermatological, nephrological and hematological parameter. In summary, with B-cell depletion that has been observed to mirror autologous CD19 CAR-Ts in autoimmune diseases, exposure that has been observed to match or exceed autologous CAR-Ts, trafficking to peripheral tissues, favorable safety profile and off-the-shelf availability, we strongly believe in the potential of our first IND lupus nephritis and we plan to expand into additional autoimmune diseases in the near future. Before I turn it over to Chen, I'd like to provide an update on the progress of our non-Hodgkin lymphoma program on the next slide. As we announced this morning, we're focusing our current enrollment efforts on mantle cell lymphoma, where we believe we can deliver a highly differentiated potentially best-in-class therapy. While the sample size is still small, we're optimistic about its potential given the favorable safety profile observed in our May data cut with no significant risk of CRS, ICANS or T-cell malignancy, the high complete response rate of 80% and the favorable durability in late-line patients with 60% of patients in complete response beyond 6 months. We are evaluating the option of advancing ADI-001 to a potentially pivotal study in mantle cell patients under an accelerated approval pathway. As previously announced, we expect to provide a clinical update in the second half of 2024 for ADI-001 in mantle cells. And we may also provide a clinical update of 001 in autoimmune diseases in the second half of the year. We are excited to expand our program toward immune indications and look forward to updating you on the progress both in our autoimmune and in mantle cell lymphoma. With that, I'll turn the call back to Chen. Chen?

Thank you, Francesco. We've outlined our strategic and disciplined development plan for maximizing the ADI-001 opportunity across lines of therapy in MCL and in autoimmune diseases as presented on this slide. I'll now briefly discuss our second clinical candidate, ADI-270. Let's go to the next slide. ADI-270 is an investigational next-generation allogeneic CAR-T program targeting CD70 via CD27 ligand. This approach has shown superiority to single-chain FV CARs and provide antitumor activity in tumors with relatively low antigen density. Coupled with the innate and adaptive targeting mechanism of the gamma delta 1 T cells to address tumor heterogeneity, Cmax and exposure by AUC profile that meets or exceeds autologous CAR-T for gamma delta 1 CAR-T platform and the homing of gamma-delta T cell reported in renal cell carcinoma, ADI-270 is highly differentiated for the treatment of renal cell carcinoma or RCC. With ADI-270, we have incorporated third-generation cost stimulatory signaling, which when coupled to CD70 binding, is designed to enhance durable activity while potentially improving the graft resilience. We also included TGF-beta dominant negative receptor armoring to ADI-270 to address suppressive tumor microenvironment factors and enhance serial killing capacity. We believe these properties make ADI-270 differentiated for RCC and other CD70 expressing tumors. We look forward to filing IND in the second quarter and initiating clinical development with RCC as the initial indication as well as progressing our next program targeting prostate cancer. Let's review our near-term milestones on the next slide. In summary, we're excited with the prospects for 2024 with significant milestones ahead and runway into the second half of '25. Let me walk you through the potential near-term milestones. With regards to ADI-001, in NHL, we expect to provide a clinical update in the second half of '24 with the latest data set from our MCL clinical study, including additional patients, updated response and durability data. We plan to potentially initiate the pivotal study in third-line MCL, which represent a significant unmet medical need. And we're also evaluating the possibility of expanding ADR-001 to earlier lines of therapy in MCL. For the development of ADI-001 in autoimmune diseases, currently, we're completing the start-up activities for the clinical study in lupus nephritis including getting new sites up and running. We expect to initiate the Phase I study in the second quarter of this year and pending rate of enrollment may provide a clinical update in the second half of the year. In the near term, we expect to expand ADI-001 clinical development into additional autoimmune diseases. And finally, in terms of our pipeline programs, we plan to leverage the meaningful differentiation of gamma delta 1 T cells. For ADI-270, we expect to file the IND in the second quarter for RCC and we look to see significant differentiation in this indication and other CD70 positive tumors. And lastly, we aim to file at least 1 IND every 12 to 18 months. With that, we thank you for joining us this morning as we look forward to a productive year ahead. I'll now turn it over to the operator to open up the call for Q&A. Operator, please?

[Operator Instructions] Our first question comes from Kelly Shi from Jefferies.

You mentioned the focus will be enrolled. Can you hear me?

Yes, good to hear. Yes.

Okay. So you mentioned the focus will be to enroll mantle cell lymphoma patients for ADI-001, just curious what is the status for the post CD19 CAR-T program in large B-cell lymphoma patients? Is it entirely paused or like just moving at a slower pace.

Yes, absolutely. Thank you for the question. So when you look at the data in mantle cell lymphoma, if you look at our last update, you see 80% CR rate. You see 60% of the patients with a CR beyond 6 months and you see great safety profile. So the decision essentially it's a budget-driven decision. We decided to focus right now for at least in the near term on exclusively MCL patients and progressing this indication is potentially our first pivotal study. In the future, we may pursue other forms of NHL, such as follicular, maybe even LDCL but in the near term, the focus is on MCL patients. Yes.

Okay. Great. And also, can you talk about the site activation for the trial in lupus nephritis with multi programs and also different mechanism of action for the program to initiate the trial in the first half of this year. Do you expect a slow enrollment pace because of the competition?

Enrollment to lupus generally is not as quick as one would wish for, and there is competition. What I can share with you is that in our discussions so far with the different KOLs, once they saw the B-cell depletion data with 001 and comparing to what we've seen with the shelf all in multiple autoimmune diseases and the fact that it's off the shelf and essentially a very nice safety profile. So we have seen significant interest in the study. So hopefully, we'll see decent enrollment. And I want to emphasize Kelly, we will be going to additional indications in the near term when we say something we usually [indiscernible] so you'll see more indications as well.

Our next question comes from Michael Schmidt from Guggenheim.

Yes, interesting move into lupus, obviously, Chen, really, really, really interesting. I noticed you're focusing on lupus nephritis. I know there's a lot going on in SLE. Can you talk about your decision to move into that category, specifically as opposed to SLE more broadly?

Francesco, do you want to take this question. Obviously, we look into SLE and lupus nephritis. I don't think there's a significant difference in terms of the ability to show difference -- to show efficacy in SLE versus lupus nephritis but Francesco, do you want to add...

Absolutely. Can you hear me, okay?

Yes.

Okay. So Michael, that's a very good question. So lupus nephritis, as you know, is just a kidney manifestation that frequently affects patients with lupus. The reason why we are starting from that particular approach in that particular indication is that it offers the opportunity of very clear and equivocal short-term endpoints to be measured because recovery of kidney function is something that is known. If the data are positive, of course, is known to be straightforward and unequivocal to measure. As you know, the endpoints in systemic lupus are more complex. They take longer to be established and to be measured. So the lupus nephritis, first of all, is clearly unmet need in the lupus population of patients and then offers the opportunity to have a relatively short-term readout and unequivocal measure of efficacy.

All right. That makes sense. And yes, interesting analysis on the B-cell depletion. What view on the need for self persistence perhaps in lupus versus the need for that in B-cell lymphomas.

Francesco, do you want to take that?

Yes, definitely. So that's another excellent question. If you believe and remember the data that were discussed in recent forms from the academic experience with anti-CD19 autologous CAR-Ts. There is a consensus that what really matters in that setting is not so much the persistence of the cells sticking around for as long as the disease needs to be kept under control but it's rather the resetting of the hematopoietic system. There is a consensus that what happens is that the CAR-T approach has the ability to provide a profound B-cell depletion, There essentially results in a resetting of the faulty B-cell clones. So that even though the cells -- the transplanted cells eventually disappear or go below pharmacologically active level, the immune system actually recovers with a healthy B-cell-mediated immunity as opposed to the faulty one, so to say, that was responsible for the disease. The field -- it has to be said that the field is still in its infancy, so we'll see how the data unfolds, but that's the current model. So in that sense, our ability for ADI-001 cells to stick around for a number of weeks as you might have seen in our oncology experience is plenty of persistence, so to say, to trigger the resetting that I was alluding to.

Yes, Michael, let me add 2 points to you. Let me add 2 points. One, when you look at the Cmax and they see an event the day 28 levels of ADI-001, that meet or exceed the autologous CD19. So that's one. Second, I think if you look at the [indiscernible] presentation from ACR, there is a nice presentation where they presented data from 15 patients with SLE, systemic sclerosis and IMM so 3 autoimmune diseases. What you learn are 2 things that I think actually address your question. One is that the T CAR-T extension is around day 9 and actually [indiscernible] says that the long-term levels are very low and not detectable. So you can see that the B-cell starts to return on average around about 100 days. So it seems like in autoimmune, you want to reset the B-cell compartment and then it starts to recover. When you look at our B-cell depletion profile, you can see that, that's what you would expect from us as well.

Okay. Super interesting. And then maybe last question just on the MCL sort of news on the Phase I study. When we think about this update coming later this year in the second half, will you include meaningfully new patients in the Phase I with MCL? Or will it be mostly more follow-up on the existing cohort.

We are right now focusing on MCL enrollment and there is significant interest in the study in MCL. The data in MCL again, as of the last data update look great. And when you think about the current alternatives for MCL, we have some significant advantages. So definitely, additional patients, more durability for the current patients and durability data for new patients.

Our next question comes from Asthika Goonewardene from Truist. [Operator Instructions]. Perhaps we'll go to the next person and we'll return to you Asthika. Let's take a question from John Newman from Canaccord.

Just had 2 quick questions here. First 1 is regarding the lupus study, wondering if you'll be allowing patients previously treated with Rituxan? And if so, will you be utilizing a washout period? And the second question is, should we expect you to use the enhanced lymphodepletion in the lupus study that you've used in the NHL study.

Francesco why don't you go ahead.

Sure. Yes. To the first question, the answer is yes, we will allow patients with prior exposure to rituximab. And yes, we do have washout periods for rituximab and for every other prior therapy that we might have in our patients. The study will be in patients who have been exposed to a number of prior therapies. Regarding the second question, we have not disclosed and we are not disclosing right now the exact regimen for the lymphodepletion. The field is still in it's infancy, so to say. So we want to preserve that the type of information. What I can tell you is that it will be lower than the enhanced lymphodepletion regimen that you are familiar within our non-Hodgkin lymphoma study.

And we'll return to Asthika Goonewardene from Truist.

Guys, can you hear me okay now?

Yes, Asthika.

Sorry about that. Okay. So just to John just asked part of the question I want to ask earlier, but let me just build on that. If you're going to reduce the amount of lymphodepletion that you're giving, will you still expect to see the same level of expansion of ADI-001 in the patient with lupus nephritis?

I would expect the same essential profile to happen. So we are not planning to go to a non-lymphodepleted type of setting, obviously. So lymphodepletion has been designed in order to allow 001 cells to expand as efficiently as in our prior experience.

Asthika, I just want to add on this. We are using the lymphodepletion that is clinically validated, it's minor differences from the enhanced lymphodepletion. The only reason that we're not sharing it is just for competitive reasons. If you look at other peer companies, they have not shared the specific lymphodepletion regimen. We worked with FDA to agree on this. So that's not a concern for us at all minor differences from enhanced lymphodepletion but just for competitive reasons, we're not sharing it.

Got it. Okay. That's clear, guys. And I apologize, I got a little bit of a harder question here. I guess the rationale for going to MCL. Obviously, it's an unmet medical need. There's -- the data that you have presented in that setting looks really good, is promising. The need for therapy like that. But what specifically was it about the large B-cell lymphoma cohort that you were pursuing that made you wanted to scale that back and park that. Was it the competition, the pace that happens right now? Is it the need to conserve capital and focus on these 2 other programs. Maybe just walk us through what got you to this point, guys?

Absolutely. Yes. Thank you for asking, and it's not a hard question at all. So let me tell you why it was not, first of all. It was not additional clinical data from this study. Let me -- what it was. It was purely a budget-driven decision and focus for the company and for the clinical team. When you look at our -- the competition that you see at least would have be specific durability hasn't been something to write home about, if you look at the recent data in ASH. In LPCL, we think that consolidation dosing is probably preferred with 2 doses of ADI-001 into lymphodepletions and when we look at the potential in autoimmune diseases, we see such a vast potential in multiple autoimmune diseases that we can go after and we just decided at this point to focus on autoimmune and MCL. So that's really what drove our decision. Hopefully, that is helpful to you.

Our next question comes from Reni Benjamin from JMP.

Hear me okay?

Perfect.

Maybe just to start off, as I kind of compare the data that you guys showed on the third and fourth slide with ADI-001, the B-cell depletion that occurs looks nearly complete, but it seems like there might be some residual B-cells remaining. In the academic data, it looks like a complete depletion. And I guess I'm kind of curious how important is the complete depletion of B-cells in an indication like this? And are you thinking about anything that you might combine B-cells with at least initially to maybe push the level of B-cells down if that one's needed.

Blake, do you want to take this question?

Yes, sure. I think when you look at the B-cell depletion levels for our existing NHL experience, it's quite complete. And actually last quite long and definitely beyond the 100-day median time for recovery that's shown in the autoimmune disease setting now. Of course, NHL isn't necessarily predictive of what we can see in autoimmune since the B-cells are may be healthier and have a faster recovery time. But as far as the completeness of B-cell depletion, our NHL experience is quite complete analytically.

Okay. And then I guess as I try to compare the 2 indications and the, call it, the translatability, is there outside of the academic experience, which I think is great and that data looks amazing. Is there anything else you guys mentioned trafficking, right, as the gamma delta T cell. Is there anything else from this profile that you think could actually make it better, do better in the academic setting?

Sure. Absolutely. I can try to address that. So the first point is trafficking to tissue. I want to say gamma delta 1 T cells probably one of the [indiscernible] cell therapy that actually traffics to tissues and can deplete the B-cells where you want them to be depleted in the right compartment for autoimmune diseases. So that could be a significant advantage when you think about gamma delta 1 T cells compared to any other types of T cells. And for example, when you think about lupus nephritis getting into those T cell nest in the kidney are going to be very helpful. And we know that there is homing to kidney of gamma delta 1 T cell. So homing in autoimmune diseases, I think, is a significant advantage. The second one is safety. When you think about these patients, many of these patients are young and have failed a couple of therapies. CRS and ICANS hasn't been a big issue in these patients with the cell therapies. We don't expect them to be any issue with gamma delta 1 T cells. But the T cell malignancy risk is kind of disturbing when you're younger, for example, lupus patients. So having something that's allogeneic will provide you essentially no or very, very much lower risk of T cell malignancy should be advantageous for these patients. And I think the last one is off-the-shelf availability. You can just go to your physician. You don't need to travel to an academic center and potentially get it right off the shelf in the community setting, given the safety profile that we've seen to date. So when you bundle all these, there is the potential for better efficacy, better safety and availability in the community setting. So we think this could be quite significant in the market, assuming, obviously, we get approval.