Cartesian Therapeutics, Inc. (RNAC) Earnings Call Transcript & Summary

Hi, my name is Mitchell Kapoor. I'm a senior biotech analyst here at H.C. Wainwright. Thank you for joining us today. Today, we're having a fireside chat with Cartesian Therapeutics. From the company, I have Carsten Brunn, the CEO; and I have Milos Miljkovic, the CMO. Thank you for joining us, gentlemen.

Thanks for having us.

Great. So we'll jump right into it. I just want you guys to provide an overview to the story for those who may not be as familiar with Cartesian as we are and maybe talk a little bit about why mRNA-based CAR T therapeutics are the way forward?

Yes, absolutely. So thanks again for having us. So as you said, we are mRNA cell therapy company. We're the most advanced in the field in autoimmune disease. What makes us really unique using mRNA for the CAR T is that we can do this in an outpatient setting. You're probably familiar when you hear cell therapy, you're thinking DNA CAR T that's done in an inpatient setting. We give our approach mRNA CAR Ts multiple therapeutic doses in an outpatient setting. Our lead asset is weekly infusions, no lymphodepletion upfront. And that's driven by the fact that mRNA gets diluted out. So our cells when they engage also proliferate, but they lose the CAR signal, which is actually a feature, not a bug actually. You want that. So we can really control PK/PD with our approach. The other advantage using mRNA is you don't have the risk of genomic integration. So we can actually -- we don't have to track patients 15 years after we dose them unlike the DNA CAR T. So I think it's a key differentiator. And I think the other differentiation, which is not new with mRNA but with CAR Ts, is that we do in-house manufacturing as well. I think that oftentimes gets overlooked, but we really control the entire supply chain. We're not dependent on the CDMO. I think that's a key differentiator as well. And last but not least, we're the only company with RCT data in MG. I think that's a huge differentiator as well.

Yes. It's really exciting data if you haven't checked it out. Hopefully, we'll cover as much as we can today on it. But if you haven't, check it out.

So you recently had this MG data Phase II in both the academic and community settings. Could you just talk a little bit about what we saw? And what are the multiple efficacy analyses that came out of this trial?

Right. So it was, we believe, the first ever randomized double-blind, placebo-controlled trial of any cell therapy in autoimmune disease. It was a Phase IIb trial. So 20-some, 30 patients were randomized 1:1 to get other Descartes-08 or placebo blinded, and we can do that because there's no lymphodepletion. It's an outpatient setting. And the primary endpoint was at 3 months, which is 6 weeks after the last infusion. As Carsten said, it's 6 months weekly infusions of either Descartes-08 or placebo. And at those 3 months, we looked at all of the myasthenia gravis scales that are usually done. So if you look at the literature, any Phase II or Phase III study, we'll look at MG-ADL, MG Composite, QMG and QoL. Those are the 4 standard scales and we looked at all 4. We picked MG Composite as the primary skill to look at because it was really selected by leaders in the field years ago to be the primary clinical endpoint for myasthenia gravis studies because it uses not only patient-reported outcomes through subjective patient assessments of how they're doing, but also uses some objective neurologist assessment. So that's why you get composite in the name. And usually, 3-point improvement in MG Composite is considered clinically meaningful. We chose a 5-point cutoff to be the responder cutoff for the trial, and we chose that because we knew we'd have more severe patients than usually than what was used for the validation study in MG Composite and what you usually see in myasthenia gravis trials. And with that 5-point MG Composite cutoff, we saw a 70% response rate for Descartes-08 and a 27% response rate for the placebo group. So it was greater than twofold response rate, which was a very large effect size even for, and especially for, a Phase II study. And it gave us a lot of information on which we'll plan the Phase III pivotal trial.

Great. And while we think all of the analyses were positive, we did get a lot of questions around the difference, the breakdown between the prespecified analysis versus the modified ITT and the ITT per protocol. Could you just talk a little bit about that and hopefully help understand what the differences between those analyses are?

Of course. Well, it's important to remember, it is a Phase II study. So the goal of the Phase II study is to give you the information you need to design a Phase III pivotal trial. And initially, when we started this study, which was 2 years ago now when we were planning and starting it, the standard population you use for a Phase II study is a per protocol analysis, per protocol population where you're still figuring out, okay, these are the eligibility criteria. So every patient you analyze must actually be eligible to be evaluated and get all of the doses of the drug that you're studying and get appropriate assessments. And that's where you get information on, well, okay, it might be that x percentage of patients will not be eligible and some of them may not be evaluated appropriately, and you build that into your Phase III population when you do an ITT analysis, an intent-to-treat analysis. And then close to the study readout, a few months before we had -- we got the RMAT designation from the FDA and as part of the back and forth with the FDA, they looked at our statistical analysis plan closely and the clinical protocol, and we got feedback from them that it should really be an ITT population that we evaluate. So we picked the subpopulation of the study that was most likely to follow the protocol. So sort of a merge between an ITT and a protocol population, and that was the prespecified primary efficacy data set. So before the data log, before any looks at the data, we prespecified that it would be academic settings. So every patient who is enrolled regardless of whether they're actually eligible or not, regardless of how assessments were done and what they actually got, as long as they were enrolled in an academic setting, that was the primary efficacy population. But of course, we looked at per protocol and full ITT and all of those, and we reported that.

Yes. Yes. Makes sense. Okay. And a key theme that we think is differentiated here is durability, and part of that comes from the mRNA engineering of the product. Can you talk about what we've seen in terms of durability today with the Phase IIa but also how that could -- we could see some more in the Phase IIb?

So in the Phase IIa, we had 7 patients who received Descartes-08 open label with 6 months weekly doses. And 7 out of 7 had a deep response at month 3, 4, 6, 9. And at month 12, 5 of the 7 still had a deep response, 2 patients lost response. A third patient lost their response 18 months after they got the dose. So we had 4 patients who still, last we heard, have a deep and durable response. Three lost that response, 2 after a year, the third after 18 months. Two of those 3 patients opted for retreatment. So they received 6 additional infusions of Descartes-08. And the first patient, the one who lost the response after a year, had as deep of a response to treatment, had, again, minimum symptom expression. And you can see that at the graph we had a preprint buyback in January had a deep response. And the last information we had was they completed a full year of retreatment. And at that full year, they still had minimum symptom expression. So they had a deeper response at month 12 with retreatment than they did with initial treatment. And then the second patient was retreated after 1.5 years. They are around 6 months out of retreatment, and they still have a deep response. So it looks like the response to the retreatment for both patients was as good, even better, in one of the patients than initial.

Great. And can you talk about how many more patients would be eligible from the Phase IIa and what the plan is for redosing in the Phase IIb?

Yes. So the third patient who lost response, they lost a response after a year. They had reasons not to after retreatment. We expect that they will be retreated. So they are eligible for retreatment. The other 4 patients we still have there, they've completed the study. We're still in contact with the PIs, but as we heard, they did not ask for retreatment or need retreatment. Of course, the Phase IIb population, so there were patients who got Descartes-08 were responders who may lose response, some of them are a year out, they will be eligible for retreatment when that comes.

And so potentially performing better after redosing, what kind of profile does that suggest for this type of therapy? Is this a once-a-year therapy? Or is this something that use once twice? What do you think about?

We'll find out.

Yes.

I think we always said a worst-case scenario is once a year. But the redosing data in CAR Ts actually that this might be actually fewer times, right? So it does make sense from a biology perspective. We're targeting plasma cells. So with the second cycle, you hit some of the cells you missed the first time around. So we're kind of shying away from talking about the cure, but we definitely -- this is not an, in our view, probably not a chronic therapy actually. And in the worst-case scenario, it's one which is still very competitive if you look at the standard of care right now.

Yes. And could you talk a little bit more about that? What's the alternative with Descartes and anything else that patients have as an option? Why do you want a profile like this?

Well, it's -- the data we have is that the primary input readout of those trials were 3 -- 2, 3 months after the infusion. And you can see the curve, the response -- the average response you lose fairly quickly after you stop the infusion. So it's a symptomatic treatment really. It doesn't hit the nodes of the disease that keeps producing the antibodies, which are the plasma cells. You're removing the antibodies. But as soon as you stop the treatment, those antibodies are keep getting produced. Descartes-08 hits antibodies at the point of production, so you eliminate the source of the antibodies. And with that, you can expect in theory, and now we're seeing possibly in practice, a much more durable response.

And not to mention the fact that there's a frequency of VYVGART versus a once a year at worst potential therapy, maybe even better than that. So yes, it definitely makes a lot of sense. Okay. And when could we see more data from this program emerge?

Yes. So we'll have -- as you mentioned earlier, durability is really what we're after. So we'll share additional data towards the end of the year from the Phase IIb. We'll update on the Phase IIa as well. Obviously, especially that -- those 2 patients that we already have. But we'll definitely have -- by the end of the year, we'll have additional data from the Phase IIb. We'll see some of the crossover patients as well. We're going to have biomarker data. The reason it makes sense to look at 6 months plus, we saw the biggest reduction in autoantibodies for the Phase III at month 6 to 9. So -- and we're also doing further work around mechanism of action as well, which is -- so it will be, I think, quite the data flow towards the end of the year.

Yes, that's great. And so when you're thinking about the pivotal trial design, what's the next steps there with the dialogue with the FDA? How are you thinking about the time of durability that would be potentially approvable? And what are you comfortable with there?

Yes. I mean let me just start -- so the next step really is to talk to the FDA. So we've kind of guided that we plan to have a meeting with the FDA before the end of the year. We got clarity on the protocol. And then obviously, we're having internal discussions on the protocol. And maybe you can talk a little bit about what we're thinking around endpoint and timing of end point?

Yes. So if you look at recent Phase III trials of biologics, the endpoint is anytime from 10 weeks -- the primary endpoint, 10 weeks to 6 months. In our open-label data, we saw the deepest response on month 6 to 9. Before really having that full data, we designed the Phase IIb, where the primary endpoint readout is at month 3, and that's where we had a response rate of around 70%. But even when we had the top line readout, we saw that at month 4, the response was even deeper. So 1 patient who was a nonresponder at month 3 became a responder at month 4. Now we don't know what the placebo group would have done during that month, but the placebo effect washes out. And you can see that nicely in the graphs that we had with the top line readout. The longer you wait, the more of the placebo effect washes out. And we'll have deeper response definitely in month 4, potentially at month 6, if the data follows the open-label patients. So we really have our pick of pushing back the primary endpoint readout either at month 4 or even to month 6 to further increase the effect size, which even if we don't change anything, even at month 3, it's a very large effect size. So when you're comparing what's the expected sample size of the Phase III pivotal trial, we won't have trouble. It's -- if you look at Phase III studies of other biologics, it should be in the lower end of those trials at the highest.

Okay. Okay. Great. And then moving to your second asset, Descartes-15, there's a lot of overlap with Descartes-08. Could you just tell us how you're thinking about that program? And how is this the next-gen product?

Maybe talking about Descartes-08 first. So people, I think, don't fully appreciate, we actually have a pipeline in the product in Descartes-08, right? We have dosed the first patient in SLE, and we've also guided now that we plan to file an IND for a basket study for a number of pediatric indications. We just received -- or we announced this morning, we received rare pediatric disease designation from the FDA for juvenile dermatomyositis. So that alone, I think, has a lot of value in that. And then the next generation is indeed Descartes-15, which at least in vitro is 10x more potent. We've dosed the first patient that we announced last week, and we'll have to decide what indication we're going to pursue this in. Phase I safety study for now. We have got in the past more interested, obviously, in neurology, rheumatology. And one indication, which kind of stands out as very attractive is rheumatoid arthritis potentially. There's a good rationale, but we'll see what the data holds, and we'll see hopefully in the next couple of months.

Yes, that's helpful. And obviously, SLE could be a potential opportunity for 08. You think about the competitive landscape, there's other DNA-based CAR Ts that are going after similar populations, maybe not the exact thing I'm thinking about. What we're seeing, I think what we've seen at least over time is that you're losing CAR T expression. I'm wondering if you all are seeing similar things. What else can you point to that says, "Our data are looking pristine here in terms of the ability to keep driving responses versus some of these DNA-based CAR Ts?"

Well, there are 2 things that differentiate Descartes-08 really. One is the mRNA technology and the other is the target, which is BCMA. And I think the second one, it's looking more and more clear that BCMA is the right target in myasthenia gravis, potentially not autoimmune diseases that are autoantibody driven and where plasma cells play a key role. In terms of mRNA, we know from preclinical studies that the mRNA lasts for a few days. The expression of the CAR protein is about a week. You don't need any more than that for an autoimmune disease. It's not oncology. It's not cancer where you infuse the cells and then in between the doses, the cancer cells grow, so you keep having a growing target. Here and our retreatment data sort of supports that, you have a pool of plasma cells and you hit them with 6 months weekly doses, you have great improvement. If there's some leftover cells, the second time around, you hit them, it's a smaller pool, so you have a much deeper effect. So from that perspective, you don't really need persistence and immune surveillance like you do in oncology where a cancer clone can pop up at any time and you need constant surveillance of conventional CAR Ts.

Okay. And then if you're thinking about going after the SLE market and some others have gone for lupus, if you show a benefit in SLE that's positive enough, would you essentially be able to eclipse the LN market as well?

Well, if you look at LN as sort of the later stage of lupus, by design and even in the Phase II study, we are enrolling patients who have moderate and severe lupus. We're coming in at an early time point in disease progression. So your goal really, I think, is -- I'm an oncologist, not a rheumatologist, but I believe that rheumatologists will tell you that the goals for patients not to develop LN in the first place. And we've positioned Descartes-08 to do just that.

Right, right. Great. Would love in the last couple of minutes for you to be able to highlight the next 12 months ahead as well as anything else we didn't get to touch on that you think is very important salient points for people to know coming out of this.

Yes. We've got a lot going on. And so MG Phase III in the next 12 months, we're going to be in Phase III with MG. I think that's a huge milestone for cell therapy in a Phase III in autoimmune disease. We'll have data of Descartes-08 in SLE. We'll be in the clinic in the pediatric basket. I don't want to guide to data in 12 months, but we'll be in the clinic with that. We'll have Descartes-15 data, and we'll guide to an indication, assuming the data is positive. And I think the other piece, we do have the cash to actually execute on all of this as well. So we're super excited about where we are. Lots going on. But I think now where we're developing Descartes-08 in multiple indications, hopefully in 12 months, we'll have 2 assets in multiple indications.

Great. This has been a very wonderful conversation. Really appreciate you all joining. Thank you to the Cartesian team.

Thanks for having us. Appreciate it.