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

Hello, everyone, and welcome to the Adicet webcast. [Operator Instructions] This call is being recorded, and the slides are available on the Investors section of the company's corporate website. I'll now turn the call over to Chen Schor, CEO of Adicet Bio. Go ahead.

Good morning, everyone, and thank you for joining us today. This morning, we announced positive data for Prula-cel, and we now look forward to discussing the results. Joining me today is Dr. Lloyd Klickstein, our Interim Chief Medical Officer and a member of our Board of Directors, who will summarize the clinical data to date supporting our decision to advance Prula-cel into a pivotal study. After that, we'll be joined by Dr. Blake Aftab, our Chief Scientific Officer, to discuss the supporting evidence of immune reset observed in our clinical study. And then we'll open it up for Q&A, where we will be joined by Nick Harvey, our Chief Financial Officer. Please note that today's call may include forward-looking statements based on our current expectations. These statements represent our judgment as of today and inherently involve risks and uncertainties that may cause actual results to differ materially from results discussed. Please refer to our filings with the Security and Exchange Commission for more information. Today is a very exciting day for us and more importantly, for patients. As we share promising data that demonstrated compelling safety and efficacy results for Prula-cel in patients with systemic lupus erythematosus or SLE with or without lupus nephritis. In heavily pretreated patient population at a 12-month mark of valuable lupus nephritis patients achieved complete renal response and 54% of the overall lupus population achieved [indiscernible] remission. Importantly, these remissions were achieved with a generally highly favorable safety profile with no ICHS, no ICANS and no CRS at above Grade 2. We understand the biology underlying Prula-cel's favorable safety profile in its differentiation from the safety profile of alpha-beta CAR-T therapies, as you will see in the slides ahead. All patients discontinued immunosuppressants, and all but 1 patient paper tapered back on steroids to 5 milligrams or less of premise equivalent. We also saw evidence of the new reset with complete CD19 positive B cell depletion followed by emergence of naive B Cell [indiscernible]. What excites us the most is the opportunity to potentially redefine the standard of care for lupus patients from a lifetime of chronic immunosuppressants and steroid treatment, which have modest efficacy, cumulative toxicities and a negative impact on their quality of life to a potential onetime therapy that achieves high rates of immunosuppressant-free clinical remissions. These data position us exceptionally well with a path for potential approval and enlarge commercial opportunity ahead. We've aligned with the FDA on a single-arm pivotal study in lupus nephritis, and we plan to initiate startup activities for the study this coming quarter. Given the high rate of Doris remission observed in the study and consistent with regulatory precedent, we expect to expand a single arm pivotal study to include lupus patients without nephritis. So stay tuned on that. Our team has established an excellent track record in enrolling lupus patients, and we saw strong interest from both patients and investigators to participate in the clinical study. We believe this positions us well for rapid enrollment of the pivotal study. Given the generally favorable safety profile observed with Prula-cel, we are aligned with FDA to enable a patient dosing of Prula-cel. The off-the-shelf availability and scalable manufacturing of Prula-cel provides commercial advantages to address the unmet medical need of many patients living with lupus. Turning to the commercial opportunity. There are approximately 35,000 refractory lupus nephritis patients with organ or life-threatening disease despite currently available therapies. And another 35,000 refractory nonrenal lupus patients with organ or life-threading disease who may benefit from a potential therapy like Prula-cel. We delivered on every key objectives we wished for in this study, rapid enrollment, a favorable safety profile supporting outpatient dosing and high rates of immunosuppressant free, CRR and doris remission. Prula-cel is uniquely suited to potentially make a meaningful difference for lupus patients while generating value for shareholders. The strength of the data we'll show you today further reinforces our confidence in the Prula-cel program and opportunities ahead. We anticipate a number of meaningful milestones as we continue to advance the program. I'll now pass it over to Lloyd to walk you through the clinical data in more details on the next slide. Lloyd?

Thanks, Chen. Here's a quick review of the trial design. This is a basket study, which includes several autoimmune indications, as you can see on the left, with the dose expansion element, as you can see on the right. We're discussing the lupus cohort with or without nephritis today. The study periods included informed consent, a screening period, the conditioning regimen, a single dose of Prula-cel, a 28-day DLT evaluation period and then patient follow-up. The primary endpoint was safety and tolerability. Secondary and exploratory endpoints focused on biomarkers of drug activity, including B-cell depletion and reconstitution and immune reset while the clinical efficacy endpoints were focused on complete responses and remission. We started enrolling lupus nephritis patients first and subsequently expanded the cohort to enroll lupus patients without nephritis. Let's next look at patient baseline characteristics. This is a summary of the baseline characteristics of the 16 lupus nephritis and 8 lupus patients without nephritis who were enrolled in the study. You can see the study participants are typical for lupus patients, primarily women with a mean age of 35 who have been living with the disease for years. These patients had inadequate responses to prior treatment, all had received at least 3 prior therapies and 71% had received 4 or more prior immunosuppressants in addition to glucocorticoids. Their mean baseline SLTA score was 13 and those patients with nephritis had a baseline mean urinary protein creatinine ratio, or UPCR, of 2.8. These patient baseline characteristics are similar to other data sets from company-sponsored clinical studies with B-cell depleting autologous cell therapies. This is a summary slide of the CRR rate in the lupus nephritis patients and the Doris rate in the entire cohort of lupus patients with and without nephritis. As you can see, the CRR rate reached 50% at month 12, and the Doris rate reached 54% at month 12. Importantly, these remission rates occurred while patients were immunosuppressant free and their glucocorticoid dose was 5 milligrams or less of prednisone equivalent. All 12-month CRR and Doris remissions are ongoing with a follow-up of 12 to 21 months, except 1 patient with a UPCR of 0.65 grams per gram after month 12, but who continues to remain off immunosuppressants. Focusing on the 5 patients with the CRR at month 12, 2 of them were already a CRR at month 6. At month 9, they remained in CRR and an additional 2 patients reach CRR, and by month 12, 1 more patient reached CRR. A similar pattern was observed for the Doris remissions. Those patients who haven't yet reached month 12 are on a clinical trajectory that we expect will be generally consistent with the efficacy we're reporting today. Notably, in addition to the 50% CRR at month 12, an additional 20% of the nephritis patients had at least a 50% decrease in proteinuria from their baseline levels, which is defined as partial renal response per protocol. As a rheumatologist, the most compelling aspect of these results to me is the potential to change the standard of care for people with lupus. Currently, these patients are faced with a lifetime of chronic immunosuppressants and steroid treatment, which have modest efficacy, cumulative toxicity and an adverse effect on their quality of life. A onetime therapy that achieves high rates of immunosuppressant free clinical remissions would be transformative. Let's talk about the safety profile. Next slide, please. Prula-cel was generally well tolerated and showed a favorable safety profile appropriate for outpatient dosing. Across the 24 safety evaluable patients, there were no dose-limiting toxicities, no immune effector cell HLH-like syndrome or IACHS, no ICANS and no CRS events greater than Grade 2. We have so far enrolled 48 autoimmune disease patients, and this generally favorable safety profile is consistent throughout the entire autoimmune disease program. In this study, Grade 1 or 2 CRS occurred in just 25% of patients. Of infections that occurred most were Grade 1 or 2 with Grade 3 in just 2 of the 24 patients. There were no cases of GvHD. We shared our safety data with the FDA and aligned to make police available going forward for enrollment in the outpatient settings. When compared to safety data reported for alpha-beta CAR T therapies and autoimmune diseases, we believe Prolia is generally better tolerated. This favorable safety profile with no IECHS, no Ians at all, and no CRS events greater than grade 2 is consistent with the biology of gamma delta CAR T cells, which is different from that of alpha-beta CAR T. So let's now discuss the scientific foundation underlying these findings and why we believe Prula-cel's differentiated biology may contribute to its generally favorable safety profile to date. To better understand the promising results, it's important to look at how gamma delta T cells differ from alpha beta CAR T subs. Adverse events such as IECHS, ICANS and high-grade CRS are primarily related to hyperproliferation of T cells and the associated secretion of cytokines, including IL-2 and others that lead to activation of innate immune cells. These are typically seen with alpha beta T cells. In contrast, our gamma delta T cells secrete fewer and lower levels of these cytokines. In the clinical study, we did not see increase in systemic cytokine levels in police treated patients as you can see on the lower part of this slide. The differentiated cytokine profile of gamma delta T cells versus alpha beta T cells is consistent also with preclinical data we have published in the past and with third-party publications. Taken together, the clinical safety findings, the cytokine data and the biological rationale provide a compelling and increasingly consistent picture. Prula-cel may be capable of delivering the benefits of CAR-T-mediated immune reset while mitigating some of the safety concerns associated with alpha beta CAR-T therapies. Let's move to some additional efficacy data on the next slide. Prula-cel drove a rapid and substantial decline in [indiscernible] comparable to the improvement reported with alpha beta autologous CD19 CAR-T therapies. Importantly, these reductions remain stable to 12 months and beyond, reinforcing the potential for deep and durable disease control. Let's move to the next slide. Prula-cel also drove a rapid and sustained reduction in the Physician Global Assessment, or PGA. 12 out of 22 patients achieved a PGA score below 0.5 at month 6 and 9 and and 11 of 13 or 85% of evaluable patients achieved this threshold at month 12, providing further evidence of sustained disease control. All patients discontinue their immunosuppressants. So all responses we're discussing today were immunosuppressant free. 21 of the 22 efficacy evaluable patients have remained off immunosuppressant therapy throughout the study. This suggests that even those patients who have not reached CRR or Doris are improved such that they do not require immunosuppressant therapy. In addition, all patients but 1 tapered their background steroids to 5 milligrams or less of prednisone equivalent. On the next slide, we'll address clinical remission in the overall lupus population with and without nephritis. This slide summarizes the Doris remission rates for the most recently approved therapies for lupus, which are prescribed on top of other drugs, such as microphenolate or azathioprine plus glucocorticoids. You can see that they failed to achieve high Doris remission rates despite the ongoing immunosuppressant therapies. The Doris rate of 54% observed with Prula-cel shown on the right is substantially higher than those reported for these other therapies and is qualitatively superior because it was achieved while patients were off immunosuppressants. Given the strength of the data we've outlined today, we plan to move quickly to advance Prula-cel into a pivotal study. Let's discuss the pivotal trial design on the next slide. We initially approached the FDA regarding a pivotal study in lupus nephritis and aligned on a single arm study in these patients with active disease and inadequate response to at least 2 immunosuppressants Subjects must meet the ULAR ACR 2019 criteria for lupus. The study would be expected to enroll a double-digit number of patients with biopsy-proven proliferative Class III or IV nalupus nephritis with or without concomitant Class V involvement. The primary endpoint would be complete renal response at 12 months. Looking ahead, we plan to discuss with the FDA the expansion of the proposed single-arm study to include lupus patients without nephritis and the Doris primary endpoint for these patients with a total study size of approximately 90 patients. In terms of timing, we expect to initiate study start-up activities by the end of the year, with interim pivotal data expected in 2028 and a pivotal readout in 2029. Let's discuss unmet need on the next slide. Despite advances in treatment, significant unmet needs remain in lupus. Currently approved therapies failed to achieve durable treatment-free remissions and patients continue to experience disease flares and progressive organ damage, while at the same time, their chronic use of corticosteroids and immunosuppressants can lead to serious side effects. These challenges highlight the need for a onetime therapy with a favorable safety profile that has the potential to deliver lasting treatment-free remissions. This slide summarizes how Prula-cel has the potential to transform the current treatment paradigm for lupus from chronic immunosuppression to a single readily administered therapy that may yield durable treatment-free remission. If ultimately approved, we believe adoption could be strong for patients, physicians and payers alike. So with that, I'll turn the call over to Blake, who will summarize what we saw in terms of immune reset. Blake?

Thanks, Lloyd. These clinical responses are supported by multiple independent biomarkers that converge on a clear picture of immune reset. Across blood, tissue, serologic and cellular measures, we have observed a consistent pattern of evidence for an immune reset and reduced disease activity. This reset begins with deep B-cell depletion in every patient who received Place. And in return, these B cells were renewed via the recovery of a less antigen-experienced B-cell population. Specifically, the reset of the B cell population was driven primarily by naive and non-class switch B cells. Let's take a closer look at the data on the next slide, please. These data come from the entire set of 22 efficacy-evaluable patients. On the left, total B-cell counts show that every patient experienced deep and complete B-cell depletion, all with multiple time points where total B-cells were undetectable in the first month after treatment. This period of deep reset was followed by an orderly reemergence of B cells within a 1- to 4-month window. On the right, the subtype analysis for these B cells reveals that this recovery and reemergence is strongly driven by naive and non-class switch B cells, precisely the less antigen experience population we want to see here. The data suggests that with Prula-cel, we are effectively giving the B-cell compartment an opportunity for a fresh start. An apparent limitation of antibody approaches in this setting is the inability to effectively deplete these B cells in tissues. Conversely, a key defining feature of gamma delta T cell biology is their natural propensity for tissue residents. We've observed this consistently across our patient experiences and across our platform over the years. and Prula-cel is no exception. It has also shown deep and complete B-cell depletion in lymph nodes. The example here shows baseline tissue on the left with B cells shown in green. By day 10, after a single dose of Prula-cel, those B cells in green were completely undetectable. And in their place, within the secondary lymphoid tissue was activated Prula-cel, shown in red and yellow. These effects also extend to key serologic biomarkers. Among patients with a valuable and quantitative data, 90% or more showed reductions in anti-double-stranded DNA titers and concomitant increases in complement reservoirs with approximately 70% returning to the normal range. This coordinated picture of B-cell reset and serologic improvement aligns directly with the benefits measured by our clinical efficacy endpoints to date, and we believe provides a clear mechanistic foundation for the responses we've observed. Let me now pass it back over to Chen on the next slide.

Thanks, Blake. With those results in mind, let's turn to the patient perspective. autologous CAR-T can be a challenging journey for both patients and providers. Patients often need to discontinue immunosuppressive therapy weeks prior to leukophoresis, to enable harvesting of the T cells with reasonable fitness and then wait for several weeks while their individualized product is manufactured and then released. During that time, many patients require bridging therapy and treatment is typically limited to specialized centers because of the associated safety risks and monitoring requirements of alpha beta CAR T. In contrast, the data we've presented today for the potential of Prula-cel, if approved, as a readily available therapy that could be administered without leukophoresis or personalized manufacturing. With immediate availability as the off-the-shelf therapy, a favorable safety profile and the potential to be delivered in community-based settings, we believe Prula-cel would offer a substantially simpler and more accessible treatment for patients. This slide highlights a key point. Not all B-cell depletion modalities are associated with similar clinical activity. In an important study published last year from Erlangen, the investigators demonstrated that protein-based approaches, such as bispecifics often result in incomplete depletion of B cells. And in the field of lupus and other autoimmune diseases have not been associated with high rate of clinical responses or remissions, whereas CAR-T therapies have demonstrated more complete depletion of T cells in tissues and higher rate of clinical responses and immunosuppressant-free remissions. We believe that distinction is central to the opportunity for Prula-cel, which we have observed to provide complete [indiscernible], immune reset and a high rate of immunosuppressant-free CRR and Doris remissions. If complete B cell depletion is a key driver of clinical efficacy, the next question is where Prula-cel fits within the evolving lupus landscape. The next slide highlights our competitive positioning in lupus with and without nephritis. First, starting on the upper left, Autologous alpha-beta CAR T demonstrated high rate of immunosuppressant free remissions, but are associated with safety challenges such as ICHS and ICANS and require leukophoresis and personalized manufacturing. Moving counterclockwise, the specifics have shown limited clinical activity compared to autologous CAR-T and will likely require more chronic dosing with associated immunosuppression and all the safety risks that come with it, such as high infection rate. mRNA in vivo CAR T offers a potentially simpler approach, but as well known with regards to mRNA, and as recently published in the New England Journal of Medicine, these resulted in humans in short duration of mRNA expression, short and limited exposure to CAR-T and incomplete B cell depletion, which is central to the potential efficacy in autoimmune indications. Lentiviral in vivo Car-T may provide more sustained expression though concerns remain around permanent gene therapy, DNA integration-related risks and potential safety concerns due to rapid alpha beta T cell proliferation. These concerns may make these lentiviral approaches more appropriate for oncology. Against this backdrop and based on the data presented today, we believe Prula-cel is uniquely positioned to address many of the [indiscernible] mutations observed across these approaches. Prula-cel demonstrated immunosuppression free remissions comparable with autologous alpha-beta CAR T with a more favorable safety profile. It is a onetime investigational therapy that is off-the-shelf and is expected to be available in an outpatient setting. If cell therapy adoption is ultimately driven by efficacy, safety and access, we believe Prula-cel is uniquely positioned at the intersection of all 3. This brings us to the market opportunity. As previously discussed, we believe Prula-cel has a significant commercial potential. There are approximately 70,000 patients with organ or life-threatening refractory lupus disease in the [indiscernible]. As we advance into pivotal development, we look forward to bringing Prula-cel as a much-needed potential therapy for lupus patients. Beyond Police, we have a broad pipeline of allogenic gamma delta CAR T cell therapies and the in vivo CAR T therapies. Our pipeline is focused on developing these therapies for autoimmune diseases, hematologic malignancies and solid tumors. As you can see on the slide, with today's data in hand, we've got a significant number of Prula-cel milestones that lie ahead. Beyond Prula-cel, we're also advancing ADI-212 towards Phase I alongside our differentiated in vivo platform and pipeline, targeting hematologic malignancies and solid tumors that are expected to result in additional milestones. We look forward to providing you additional updates on these programs in the near future. Today's data highlights that Prula-cel may provide a meaningful future treatment option for lupus patients and deliver significant short- and long-term value to shareholders. Thank you for joining us today. With that, let's open up the call for Q&A.

[Operator Instructions] Our first question comes from Dennis Ding with Jefferies.

Congrats on the phenomenal data. So I have 2 questions. Number one, on the platform. I'm just curious if you had any kind of potential discussions with pharma over the last 6 to 12 months. And what we're seeing with alpha beta T cells and their potential safety liabilities, do you think pharma and maybe even also the broader industry are starting to appreciate that gamma delta T cells have a different risk reward? Or do you think the platform needs to be further derisked with pivotal beta? And then question number 2 is just on the interim. Just how are you thinking about the different scenarios you're thinking about for that interim? And how would the stats work given the pivotal of the single-arm trial?

Thank you, Dennis, for 2 good questions. I'll start with the first one, and perhaps Lloyd can jump in with regard to the second one. We certainly have seen overall an increase in the interest in the platform. And in Prula-cel, since the liabilities with the alpha beta T cells has been presented primarily in the autoimmune field in -- unlike in oncology, where maybe this risk/benefit is reasonable, in our immune yield, I believe that patients don't want to take the risk on a ICHS. It has been presented as we've seen in 2 cases with rapid manufacturing. But generally, there are concerns that this will be presented with regards to alpha beta T cells in general because you never know who is the patient that has great T cell fitness and might hyperproliferate and eventually leads to these ICHS. So one of the key benefits indeed that we see with our platform is this very, very favorable safety profile that is really appropriate for autoimmune diseases. And combined with the efficacy that we've seen, I think we are in a sweet spot. So to summarize the answer to your question, we certainly see an increase in the interest generally from pharma companies. Obviously, we don't want to comment on any specific discussions, but that's certainly something that we expect to be helpful. Your second question, I believe, was regarding the potential plan for -- we do plan for an internal analysis. So Lloyd, perhaps you can address the second question.

Sure. Thanks, Chen. So the details of the study design are not finalized yet. We have an upcoming meeting with regulators on this topic. We have competing issues with the interim analysis, of course. We don't want to spend alpha. We don't want to increase the study size and increase the duration, while at the same time, we'd like to generate some confidence building data early in the study. So we're working through that. And as soon as we have it finalized, we'll disclose it.

I might add 1 point here, Dennis. What's nice about the plan for the pivotal study essentially, it's the same patient population. They're refractory to at least 2 immunosuppressants. In our case, as you've seen, all the patients were refractory to 3 immunosuppressants and about 70% of them were refractory to 4. So it might be quite easy to enroll these patients, and there's really no difference from the patient population that withdrawn in the study. So we're confident in the probability of success, and we're even more confident in our ability to enroll the study quite quickly. Thank you for both questions.

Our next question comes from Yatin Suneja with Guggenheim.

Can you hear me?

Yes.

Perfect. Congratulations on very good data and updates. Maybe just a couple for me. First one is with regard to the lupus nephritis. Could you just talk about -- I understand you're going to do 1 study, a single-arm study. Maybe if you can put some numbers around how big that study might look like, how many patients that could be? And so that's number one. And the second question is regarding the the CRR rate that you're seeing at 12 months. Obviously, you have a lot more patients moving in from 9 months to 12 months that's in the next 3 to 6 months time frame, how should we think about what is the trajectory of responses you are seeing in those 6 patients that are going to move from 9 to 12? Just trying to get a sense that once you have, let's say, all 16 patients out to 12 months, how should we think about the response rate? And then what about the durability of responses like anything you can comment on? Because you should have patients that have more than a a year worth of follow up.

Sure. So let me -- I wrote your questions. Let me address the first one, and then perhaps Lloyd can address the second one. Well, in lupus nephritis essentially, we would expect our endpoint to be immunosuppressant-free completely in our response. So actually no drug out there that provides immunosuppressant-free completely over strong. So your comparator is essentially 0. If you look at examples of pivotal studies that have been started by 2 other companies, there's 2 examples. I wouldn't -- I'm not going to mention the specific names of the companies. They are available in the clinical trials [indiscernible]. But these [indiscernible] studies are in the range of, again, single-arm studies in lupus nephritis patients and the number of patients is in the range of 35 patients to 50 patients. And if you look at the clinical studies that include both [indiscernible] and [indiscernible], then, again, these examples are on clinical trials, etc. There's 1 example when it's 89 patients, and there's a different company that initially started, for some reason, a randomized study and then changed to a single arm and in their case, it's 179 patients, and we think it's just because they started in a different way. So bottom line, single -- double-digit number of patients, whether it's LN or LNN [indiscernible], I think given our enrollment track record, we can enroll it quite quickly. Now regarding your questions on CRR, I think I'll divide into 2, 1 of them was what can we comment on the durability beyond 12 months. And second one, I guess, is what do we see in the patients at the 9 months? And what's the trajectory? So perhaps, Lloyd, you can address these questions.

Sure. Thanks. So first question was durability of response. We'll start at the back and move up. So for the 12-month CRRs, all of them have remained in CRR, except for 1 whose urine protein creatinine ratio has bumped up a tad to 0.65 grams per gram, but the patient remains well in off immunosuppressants. For -- the second part of your question was what about the patients who have not yet reached month 12. And we have 9 -- 6 of them at 9 months, and of those, they are on a trajectory that we do not expect is going to change overall the rate of response we see at 12 months.

The next question comes from John Newman with Canaccord Genuity.

I'm just curious, did you have any patients in the trial that were previously exposed to other CD20 targeting therapies? You had a nice slide discussing how you think the mechanism of action for gamma delta T cells is more effective there. Just curious if there were patients in the study that had previously been exposed to other CD20 therapies. And if so, how those patients are doing?

Yes. Maybe I'll take that one, Chen. So we did have a few patients who had received rituximab in the past. And it didn't have any effect on the responsiveness to our therapy. I think the most likely reason is you saw from some data that Chen showed that antibody therapeutics don't effectively deplete B cells and tissues. So the pathogenic B cells are unlikely to have been adequately exposed to rituximab. So it didn't have any effect on the efficacy of our therapy.

Great. And if I could ask 1 additional question to Dr. Klickstein. When we're talking about late-stage lupus nephritis patients I'm wondering if you could discuss just briefly the risk of severe kidney damage or eventually dialysis or something worse. And could you talk about potentially how Prula-cel perhaps could help prevent some of these cases in the future?