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

Good morning, and welcome to the Cartesian Therapeutics Conference Call. [Operator Instructions] I would now like to turn the call over to Blaine Davis, Chief Financial Officer of Cartesian.

Thank you, operator, and good morning, everyone. Thank you for joining us today to review updated results for the follow-up portion of our Phase IIb clinical trial of Descartes-08 in patients with generalized myasthenia gravis, as well as an overview of our planned Phase III trial. The press release reporting and the results can be found in the Investors and News section of the Cartesian Therapeutics' website. Turning to Slide 2. Before we begin, I would like to remind you that during today's call, we will be making certain forward-looking statements. These statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Actual results may differ from our forward-looking statements due to various factors, including those described in the Risk Factors section in our most recent annual report and subsequently filed quarterly reports that are on file with the SEC. Except as required by law, we disclaim any obligation to update these statements even if our views change. Joining me on today's call are Dr. Carsten Brunn, President and Chief Executive Officer; and Dr. Milos Miljkovic, Chief Medical Officer. During the Q&A portion of the call, we will be joined by Dr. James Howard, Professor of Neurology, Medicine and Allied Health at the University of North Carolina School of Medicine and an investigator in the Phase IIb trial. With that, I would ask you to please turn to Slide 4, and I'll turn the call over to Carsten.

Good morning, and thank you all for joining us. We're delighted to share positive updated results from the follow-up portion of our Phase IIb trial of Descartes-08 in generalized myasthenia gravis or MG, as well as details about our planned Phase III trial following a recent meeting with the U.S. FDA. For those less familiar, Descartes-08 is autologous mRNA engineered CAR-T, targeting B-cell maturation antigen for BCMA. Milos will get us through the data in detail shortly. I'd like to highlight a few key takeaways. In the follow-up portion of the Phase IIb trial, we observed both deepening and durable responses over time in participants treating with Descartes-08. Notably, the deepest responses were observed in participants who had not received prior biologic therapies such as complement or FcRn inhibitors. And importantly, Descartes-08 continues to be well tolerated supporting outpatient administration without the need for lymphodepleting chemotherapy. Following our recent meeting with the U.S. FDA, we're excited to share details of our planned Phase III trial, named AURORA. This pivotal study will assess the proportion of Descartes-08 participants achieving an improvement in MG-ADL score of 3 points or more at month 4 relative to placebo as its primary end point. We're highly confident that the results we're sharing today align well with the design of AURORA study, which we expect to commence in the first half of 2025. Turning to Slide 5. The Phase III AURORA study designed to be registration enabling will be very similar to the Phase IIb study in its design. Approximately 100 participants with Acetylcholine receptor autoantibody positive or AChR positive, MG, to be randomized 1:1 to receive 6 weekly outpatient infusions of either Descartes-08 or placebo without lymphodepleting chemotherapy. After completing the blind follow-up assessment at month 4, participants receiving placebo will be eligible to cross over to Descartes-08 treatment. The primary endpoint will assess the proportion of Descartes-08 participants with an improvement in MG-ADL score of 3 points or more at month 4, relative to placebo. Secondary endpoints will include assessments of safety and tolerability, the proportion of participants achieving a reduction of 4 points or more in the MG composite score and improvements in other validated MG severity scales, including QMG and MG QoL 15R. Before Milos dive into the detailed results, let me first provide a brief overview of MG and share what we believe our approach has the potential to transform the autoimmune landscape. Turning to Slide 6. MG is a rare and progressive autoimmune disease marked by debilitating fatigue and muscle weakness. It affects over 120,000 people across the U.S. and EU. Patients often suffer from vision disturbances like double vision, along with difficulties in speaking, swallowing and even breathing. Current treatments for MG typically require chronic or frequent administration, offer limited durability, can be highly burdensome for patients. We believe MG represents a significant area of unmet medical needs. Moving to Slide 7. With our innovative approach using mRNA CAR-T, we believe we are well positioned to extend the benefits of cell therapy into autoimmunity. mRNA cell therapy is designed to eliminate the need for lymphodepleting chemotherapy, avoiding issues such as cytopenia, secondary malignancies and other chemotherapy-related toxicities. Descartes-08 is designed to be administered in an outpatient setting with a convenient schedule of just 6 once-weekly infusions. Furthermore, the transit nature of mRNA is intended to ensure a more predictable response and effectively eliminate the risk of genomic integration. Moreover, we can administer Descartes-08 at therapeutic levels without the risk of uncontrollable proliferation. As shown on Slide 8, Descartes-08 is an mRNA cell therapy designed to treat autoimmune diseases like MG. It specifically targets BCMA, a service engine found in plasma cells, plasmablasts and plasmacytoid dendritic cells or PDCs. Descartes-08 is designed to eliminate these cells through a dual-action mechanism. The wait of anytime from vein-to-vein time from apheresis to the first dose is as short as 3 weeks, and we can derive 2 dosing cycles on a single round of apheresis, one for the initial dosing and another for potential retreatment. Descartes-08 has received both orphan drug designation and more recently RMAT for Regenerative Medicine Advanced Therapy designation for MG. Descartes-08 has also received rare pediatric drug designation for juvenile dermatomyositis. With that, I'll hand the call over to Milos, who will guide us through the detailed data beginning on Slide 9.

Thank you, Carsten. On this slide, you can see a deepening of responses after month 3 in the primary efficacy data set. I'll note that the definition of the primary efficacy data set for the open-label follow-up portion of the trial was the same as in the masked portion. So it was a modified intent-to-treat population of all participants enrolled it at academic medical centers who received at least one dose of Descartes-08 and completed at least one post month 3 MG-ADL score follow-up assessment. Two MG composite responders at month 3 withdrew from the study before month 4 for personal reasons. So the total number of participants at month 4 and 6 is 12. Of the 12, 8 have reached month 9 follow-up and 5 reached month 12 follow-up and have completed the study. I would also call attention to the horizontal orange line on each graph, which flags the decrease, which clinicians recognize as being clinically meaningful. For MG-ADL, this would be a 2-point decrease and for MG composite a 3-point decrease. On the left side, we show an average MG-ADL reduction of 5.5 points at month 4 for Descartes-08 treated participants. And on the right, an average MG comp reduction of 7.1, both of which exceed the thresholds clinicians generally consider clinically meaningful. We have 2 additional observations. The first is that at month 6, which is well past the last infusion of Descartes-08, where 1/3 of all participants achieved minimal symptom expression. This is consistent with what we saw in the Phase IIa trial, where deepest responses occurred at month 6 and 9. The second observation is that 80% of all participants who reach month 12 and this includes both responders and nonresponders at month 3, maintained clinically meaningful responses as measured by both MG-ADL and MG Composite. So you can see that we are quite confident that these results support the design of our upcoming Phase III AURORA trial. As Carsten noted, AURORA's primary endpoint will be the proportion of participants randomized to Descartes-08 who achieved at least a 3-point reduction in MG-ADL score at month 4 compared to those randomized to placebo. Turning to Slide 10. We have been asked many times if there are any particular patient characteristics that could help determine who is likely to have the deepest response. And what we observed was that the participants in the primary efficacy population who had no prior complement inhibitors or prior FcRn inhibitors had a deeper response that was more durable than those who had prior biologics, with an average MG-ADL reduction of 6.6 points at month 4. In addition, we observed that 57% of these participants who have no prior biologics, achieved minimal symptom expression at month 6. Of the 2 participants with no prior exposure to biologic therapy that reached month 12, both maintained at least a clinically meaningful response with one continuing to demonstrate minimal symptom expression. It is important to note that while we as well as the key opinion leaders we've spoken with, believe this is highly compelling, these are very small numbers. However, we do believe that this corresponds with the data we observed in the Phase IIa open-label trial, in which none of the participants had received FcRn inhibitors given that they were not approved at the time. And we're one of the 3 participants who love the response at month 12 had history of receiving a complement inhibitor. We look forward to learning more about this effect, which may ultimately support treatment with Descartes-08 ahead of biologic therapy in the Phase III AURORA trial. Turning to Slide 11. The safety profile observed in the follow-up portion of the Phase IIb trial was in line with what we reported at the time of our top line data readout as well as the Phase IIa portion. Of note, there was a Grade 2 upper respiratory infection reported in both the Descartes-08 and placebo groups. There were no other new AEs reported, including no hypogammaglobulinemia and other infections and no difference in vaccine titers between Descartes-08 and placebo. Turning to Slide 12. I want to provide a quick update on data from the Phase IIa portion of the trial. As you may recall, we previously reported that there were 3 participants in the Phase IIa portion who had a response to Descartes-08, but then reverted to baseline, 2 after a year of treatment and the other after 1.5 years. As previously reported, there were 2 participants who were retreated and experienced rapid improvements in clinical scores and maintained minimum symptom expression for up to 1 year after receiving a second treatment cycle. The time course and magnitude of treatment response upon retreatment were similar to those seen when the participants were first treated. Notably, in the one participant who has completed their 12-month retreatment follow-up visit, the duration of response seems to be longer this time, and they have maintained minimum symptom expression. Today, we are able to report on the third retreated participants, at their month 2 visit, which was 2 weeks after their last Descartes-08 infusion, they achieved a 4-point reduction in MG-ADL and 6-point reduction in MGC scores from baseline, without reports of CRS or ICANS. We continue to be encouraged by the potential for retreatment with Descartes-08 to achieve similar or better outcomes to initial doses. The next 2 slides highlight data we previously shared at the AANEM meeting earlier this year, which are important for contextualizing the data we are sharing today. On Slide 13, you can see that the antibody levels observed in the Phase IIb trial followed the same kinetics that we saw in the open-label Phase IIa trial. More specifically, in the open-label trial, we signed approximately 20% reduction at month 3. And in the Phase IIb trial, an approximately 15% reduction compared to a 37% increase in participants who were randomized to placebo. Notably, the deepest reduction we observed in the open-label trial at month 6 and month 9, which you can see on the right, corresponds to the deepest responses we saw at month 6 and month 9. And as you just saw, this aligns with what we are observing in the Phase IIb trial. On Slide 14, you can see that there were no decreases in immunoglobulin levels and no decrease in vaccine titers in the Descartes-08 group compared to placebo at month 3. We expect to have longer-term data at a future time. And on Slide 15, I would like to highlight 2 ways in which we could observe the biological activity of Descartes-08 in the open-label Phase IIa trial. On the left, you can see results of high throughput sequencing of the T cell receptor clonotypes, shown as TCR diversity on the Y axis, plotted against MG-ADL scores, which is on the X-axis. There are 2 time points plotted for each Phase III participants, before treatment in gray and after 6 once-weekly infusions in orange. You can see that the reduction in MG-ADL scores following treatment corresponds with reduction in TCR diversity, and this correlation is statistically significant. We and other groups have previously shown that this reduction in TCR diversity is outside of normal fluctuations you would see in someone not receiving treatment. On the right-hand side, we show changes in the autoreactome after treatment with rituximab, which is the first box plot, after conventional CD19 CAR-Ts, the middle box plot and after 6 once weekly infusions of Descartes-08, which is on the far right. The first 2 box plots are from previously published research in patients with MG and B-cell lymphoma. And the data on the far right is new data from our Phase III study. You can see that the change in autoreactome after CD19 and CD20 targeting therapy is minimal, within R-value of 0.85, which is close to normal fluctuations in healthy volunteers. While there is a large change in the autoreactome after Descartes-08, which targets BCMA with an R-value of less than 0.5, showing clear biological activity. We are anticipating similar data from the Phase IIb RCT in the coming year. With that, I will turn the call back over to Carsten.

Thank you, Milos. Before we wrap up our prepared remarks on Slide 16, I want to highlight a key strategic advantage for Cartesian, our in-house GMP manufacturing, which allows us to maintain strict control over product quality and production costs. Turning to Slide 17. In summary, we're highly encouraged by the data presented today. The deep and durable responses observed over 12 months, along with the fact that Descartes-08 continues to be well tolerated, reinforce our belief that it has the potential to become an important addition to the MG treatment landscape for a broad range of patients. We are particularly excited to further evaluate its impact on patients who have not received prior biologic therapy. Importantly, these results provide strong support for the design of our planned Phase III AURORA trial, we just noted earlier, we expect to commence in the first half of 2025. On behalf of the entire Cartesian team, I want to sincerely thank the participants, investigators and site staff who have made this trial possible. We would not be here today without your contributions. Before we open the line for questions, we would like to take a moment to hear Dr. Howard's perspective on today's data. So I'll turn the call back over to Milos.

And it's my pleasure to welcome Dr. James Howard to the call. Dr. Howard, what are your first impressions of the data we just saw?

Particularly those who we have observed with very durable responses and deep responses that are in excess of a year before acquiring retreatment without the need for any other intervention. I'd also like to highlight the fact that the adverse event profile is exceptionally small, particularly without any evidence of cytokine release syndrome or ICANS. The ability to treat our patients so infrequently and still maintain quality of life and prolonged duration of effect is exceptionally gratifying. As you all know, our current standard of care is fraught with multiple dosings, broad adverse event profiles. Our targeted therapies over the last 5 years, 6 years, while very gratifying and transformational still require multi-dosing on an ongoing basis in order to maintain effect. And I think what we're seeing for the first time that we can achieve prolonged durability in the absence of significant adverse events of us improving quality of life for our myasthenic population.

And where do you see Descartes-08 in the overall treatment landscape of patients with myasthenia gravis?

Yes. It's a great question. Our current philosophy in what myastheniologist, if I can use that term, are moving to, are asymptomatic with less than Grade 1 or no CTC adverse event profiles. Ideally, one could envision this as first line. In reality, that's not going to happen immediately. Regrettably, the practice of neurology and medicine, in general, is by the payers, not by the clinicians. But I see this clearly in those individuals who have failed other therapies or in whom adverse event profiles are such that those therapies are unwarranted with the hope that we can move such a therapy up closer to first line over time.

I see. And with the Phase III study that is a step towards bringing the Descartes-08 to patients, what do you think about the study design overall? And then how interested would patients be to participate in a trial like that?

Yes. The study design is quite good, and it was well accepted in our previous Phase Ib and IIa studies that we've done. I think we would see great acceptance by our patient population. While we have new therapies in use at the moment, remember that in all of our clinical trials, around 30% failed to respond to those new therapies. So we have populations of patients who still have unmet need, and I see them readily accepting this.

Excellent. Thank you. So I will turn the call over to questions now.

[Operator Instructions] Your first question comes from Thomas Smith from Leerink Partners.

Congrats on the updates here. A couple of questions on the Phase IIb data update. I was wondering if you could just talk about the proportion of Descartes-08 patients that achieved that 3-point reduction in MG-ADL at 4 month in the Phase IIb study? And then if you could just comment on, I guess, what you're assuming for the Phase III design here, both in terms of Descartes-08 response and in terms of placebo response?

So for the -- first question first, it was the same percentage of responders using the MG 5-point composite cutoff MG-ADL. As you remember -- at month 3. As you remember, the lines pretty much overlap between ADL and MG composite response. ADL is a narrower scale. So the comparable difference looks larger in MG composite, but they're similar. And I'm sorry, can you repeat the second question, please?

Yes. Can you just comment on what you're assuming for treatment and placebo response in the Phase III?

Well, we are assuming what we saw in the Phase IIb. So we expect to see further decrease in the placebo response for month 3 to month 4. However, we're going with a conservative variant of that placebo response being maintained from month 3 to month 4.

Got it. That makes sense. Okay. And then I was wondering if there was any update on the placebo-treated patients who crossed over to Descartes-08 in the Phase IIb study at the 12-week time point. Anything you could share with us on safety or efficacy or when we might have visibility into that patient experience?

Yes. For safety, there are no big red flags and no changes to the safety profile, the efficacy data is not mature yet. As you know, our patients don't immediately jump to treatment. We need to fit the treatment around their schedules so that everybody has reached the evaluable time points yet.

Understood. That makes sense. And maybe just one last question if Dr. Howard is still on the line, but I was wondering if you could comment on -- and maybe expand on his comments a little bit in terms of the Phase III trial design and specifically around the 4-month time point. And measuring the primary efficacy analysis at 4 months as opposed to the 3 months in the Phase IIb or 6 months as we've seen in some other studies?

Yes. You saw in some of the previous slides that the placebo response started to return towards baseline in around 3 months. And we think the 4-month window will give us an adequate separation between the actively treated arm and the placebo arm. We have shortened, and we've done this in other trials as well, the duration and most go out to 26 weeks in order to move patients into open-label extensions earlier and afford them the therapy that they would not otherwise get and have a prolonged impaired quality of life, if you will. We believe that the response will be robust enough that the 4-month point will be quite acceptable to see clear differentiation.

Next question comes from Tyler Van Buren from TD Cowen.

Congrats on the stellar data update and strong durability. Just given the very strong data or the additional strength of the data in patients with no prior exposure to complement and FcRn inhibitors. Sorry, for the pivotal, is it possible that you could enroll patients with no prior exposure or at least preferentially enroll those patients? Curious to get your thoughts there.

Well, yes, that's a great question. We can't actually stratify by -- prior biologic therapy by ongoing therapy. We haven't disclosed the details of stratification and what percentage that would be, but we would want the Phase III population to match the Phase IIb population as closely as possible because that's the data we're going after. And in the Phase IIb, it was around 20% to 30% of patients who were on prior biologics and around 20% of patients had ongoing biologics. So we want to keep the Phase III population similar to that.

Okay. All right. And then Dr. Howard, your thoughts on the data were quite clear, but as we think about patients with no prior exposure to treatment, how would you position Descartes-08 relative to FcRn inhibitors or complement inhibitors? And how would you present it as an option to your patients and what patients do you think would be most appropriate for Descartes-08 versus the others?

Yes. So FcRn inhibitors are transiently clearing circulating in the body, a chemical plasma exchange, if you will. The durability of such is variable among patients but probably 50% have durability less than 12 weeks, 3 months, and have to be retreated in terms of their cycle. And with one product, I think the average number of cycles of therapy are around 5 per year. The ability of something like Descartes-08 to give prolonged durability in excess of a year and even as long as 18 months, as you saw in one patient, is sort of a no-brainer to any patient being treated. And so I see this quite advantageous in that regard. And I missed the second part of your question, if you could repeat that for me, please.

No, it was just how you would position it versus FcRn and biologics. I guess you answered that. Just as a quick follow-up, what percentage of your patients would you say would be eligible for your MG patients for a therapy like Descartes-08?

So if we take AChR positive only, and I would say that 20%, 25% have not been exposed to something like plasma exchange, I would say 60-plus percent have not been exposed to -- 70% not been exposed to FcRn or complement inhibitors at this point in time.

Your next question comes from Gil Blum from Needham & Company.

Allow me to add my congratulations on the update. Maybe a quick question on the pivotal study design. So it looks like we're going back to MG-ADL. Was this something that the FDA agency requested or kind of a debate point that came across later?

Yes, that's a great question, Gil. So we still think that MG comp is an excellent scale and FDA agreed to have MG comp as a secondary endpoint, but was more comfortable with MG-ADL primary. They very closely correlate. So in our view, they're interchangeable. So we're quite happy with an MG-ADL of 3 points or better as the primary and then the MG comp as the secondary.

All right. And as it relates to the update on longer-term follow-up from the patients treated in the Phase IIb, was there any change in any of the nonresponders? I know we may have seen longer-term effect post month 3, if you guys have any comments on that?

What we saw is, as we said before, one nonresponder becoming a responder at month 4 and responders deepening their response from month 4 to month 6 and 9.

Excellent. Maybe a last comment. Is this the first time you guys mentioned that you can get 2 dosing cycles out of 1 apheresis? Just wanted to confirm that.

No, we've been guiding this for a while. We obviously continue to improve our process. So currently, we can get basically 12 infusions or 2 full treatment cycles out of 1 apheresis, which obviously has a big impact on cost of goods and convenience for patients not to come back for apheresis. And we obviously continue to further improve the process as well. So -- but I think we've guided for a while now that we can get 2 cycles out of 1 apheresis.

Your next question comes from Mitchell Kapoor from H.C. Wainwright.

Congrats on the update. The first thing I wanted to ask about is the AURORA enrollment and kind of the setting these patients will be enrolled at. Can you just contextualize from what we have with the Phase II data set in terms of academic community, inpatient, outpatient, how that translates to the Phase III? And just the context, what's risk mitigating from this setting going into the Phase III and where the patients will be enrolled there?

Thank you for that question. Yes, that's -- a big part of learning from the Phase IIb is that we need to take good care that the sites are qualified to both administer Descartes-08, which we showed it can be administered in both academic settings and community centers, but also that they're able to execute a randomized double-blind placebo-controlled trial, which requires having trained and certified evaluators and more than one because people go to conferences, go to vacations and you want to ensure that there's consistency and uniformity in training in each site and across all the sites. So it will be part of site qualification, how many trained and certified evaluators do you have. And we will actually provide a more stringent training to all of our investigators on the trial. The second thing we saw in the Phase IIb is that not every site is equipped to evaluate seronegative patients, but having only AChR-positive population in the Phase III study sort of mitigates that risk.

So I guess, I think, you all mentioned that all these patients will be enrolled in outpatient and academic centers. Is that kind of in line with how you started to see essentially the best control data sets from the Phase II? That's kind of the learning and what you're going to apply to the Phase III enrollment, is that what I'm understanding?

Yes. I mean basically, the learning is that we want highly experienced clinical trial sites and they're, in general, academic, but they're also community centers who are involved in clinical trials. So we have a tighter site selection for the Phase III. As Milos said, it's key learning from the Phase IIb.

Okay. Great. And then the 2 participants that were lost to follow-up, do you know if they went on to receive another therapy?

Not to our knowledge, but they are not on the study anymore. So we're not getting real-time information. As of their last follow-up, they were still MG composite responders.

Okay, great. That's helpful. And then last one from us is just based on the rate of enrollment you've had so far, could you just help us understand what you're expecting in terms of the enrollment rate for AURORA and maybe when we could get to that data set?

It's a rare disease where you don't expect too many patients per site. So we're expecting the same enrollment pace as in the Phase IIb with more sites providing that pace.

Yes. I mean we haven't guided, but I think the one guidance we've given that with the cash run we have, we will be able to complete the study in that time frame.

Your final question comes from Kristen Kluska from Cantor Fitzgerald.

Congratulations on this update. I wanted to ask now that you have a number of months of follow-up for a number of these patients, are you hearing any anecdotes or maybe Dr. Howard can also speak to this with his patient's experience. Any anecdotes from the patients that essentially correlate with some of these scale scores that you've observed?

Well, more than anecdotes, we have data on minimal symptom expression. There's no going around somebody having an ADL score of 0 to 1. And we have 1/3 of all patients and more than half of patients who weren't on prior biologics, maintaining minimal symptom expression in month 6. So it's a very high proportion, but also it's maintained through time. So it's not a single point in time when somebody has MG-ADL 0 to 1, but a week before and after they have a 3, 4, 5, it's having no symptoms of ADL for a prolonged period of time.

Got it. And I know you're not commenting specifically on the enrollment timing other than your comment relative to cash. But can you just give us a sense about anything around a rough estimate number of sites? How many countries, et cetera, that would be very helpful.

Of course, It's around a 100-patient study and to achieve around 100 patients in the time frame we're looking at, you need to go outside of the United States. We already have sites in Canada and Turkey. So those are logical next steps. And because we already have infrastructure in Europe, we are looking at a few other European countries.

I'd now like to hand back over to Carsten Brunn for final remarks.

Again, thank you all for joining us on today's call. We look forward to sharing more updates on our progress in the coming months. Have a wonderful rest of the day. Thank you.

Thank you, everyone, for attending today's call. You may now disconnect. Have a wonderful day.