Lyell Immunopharma, Inc. (LYEL) Earnings Call Transcript & Summary

Great. Thank you all for taking the time to join us for another session at the Baird Healthcare Conference today. My name is Jack Allen, for those who I haven't met in the audience, and I cover the biotech space. And for this session, I'm joined by the CEO of Lyell Therapeutics, Lynn Seely. Lynn, thank you so much for taking the time to join us.

Thanks. Well, I'm delighted to be here and have a chance to tell you about Lyell Immunopharma. For those of you who are not as familiar with Lyell, we are a cell therapy company focused on next...

Lynn, thank you again for taking the time to join us.

Well, thank you. I'm delighted to have a chance to tell you about Lyell Immunopharma. For those of you who are not as familiar, Lyell is a cell therapy company focused on next-generation CAR T-cell therapies for patients with cancer, specifically hematologic malignancies as well as solid tumors. We have 2 programs in the clinic. Our lead program is ronde-cel, which is a next-generation CD19/CD20 CAR T-cell therapy in 2 pivotal trials for large B-cell lymphoma. We have a single-arm study, the PiNACLE study, which is going to have a significant data update this year, and we expect our first BLA submission next year. So Lyell is on its way to hopefully becoming a commercial company. We also have a first-of-its-kind head-to-head CAR T-cell therapy company of our product, ronde-cel versus investigators' choice of what are the approved CD19 CARs, axi-cel or liso-cel. And then we have a second program in the clinic, we call LYL273, which is a GCC-targeted CAR T-cell therapy for patients with metastatic colorectal cancer. So it's a full lineup. And I'm pleased to report we also have our own manufacturing facility, which gives us a lot of control over our destiny because that's a very important component of cell therapy.

Great. Thanks so much for the overview. I know we got a lot of ground to cover today, but maybe we can start with ronde-cel and step back and take a 50,000-foot view of ronde-cel and the design of the product. So this is a CD19/CD20 OR-gated CAR T. What does that really mean? Does it mean you can hit either antigen? And how does hitting both antigens change the safety and efficacy profile compared to CD19 autologous CAR Ts?

Sure. So just to back up a little bit, I think many people are aware that CD19 CARs have really transformed the treatment for patients with large B-cell lymphoma, which is -- was really a very deadly disease in the past, and they've made great benefit. But what became quite apparent is there's still significant room to improve upon outcomes, particularly driving more patients to complete remission or complete response as well as driving longer duration of response because what patients are really looking for is this treatment-free, disease-free interval. And the beautiful thing about CAR T-cell therapy is it's a onetime treatment, which really is designed to bring those sorts of meaningful responses. And so the inventor of ronde-cel is an engineer-turned-biologist, really brilliant scientist, Yvonne Chen at UCLA, who really rationally designed this CAR T-cell therapy. And what she did is she wanted to design a CAR that was full potency at either CD19 or CD20. And this is really important because some malignant B cells have no CD19. And so therefore, CD19 CAR T-cell therapy won't benefit the patients at all. In this case, if the patient has either CD19 or CD20, we can benefit them, and that's expected to drive more complete responses. In addition, we know that one of the main causes of escape from CD19 CARs is that the malignant B cells can drop the CD19 antigen itself as sort of this evolution to avoid therapy. Well, it's very difficult for these malignant B cells to drop 2 antigens. And so by having a dual-targeted CAR, we can drive more complete responses and longer duration of responses. But then she did one more thing, which was really quite special is the field has really learned that if your CAR T-cell therapy product includes naive or central memory T cells, these are the -- think of it as the more fit and healthy younger T cells that actually those are the cells that are associated with longer overall survival, for example, in the ZUMA trials of axi-cel. And so we -- she really designed this product to specifically have a high percentage of naive T cells. So we think it's this combination of the dual targeting plus this very novel manufacturing process that is helping with the benefits that we're seeing.

Yes. And to that end, the manufacturing process, while it does select, I believe, CD62 is the marker that you select for, it's in line with CD19 autologous manufacturing process as it relates to timing from vein-to-vein. How do you think about that?

Yes. We just, in early summer, presented data where we, on the first 100 patients that we've treated, we had a 97% success rate in delivering product to patient and the median vein-to-site time is 16 days. So very much in line with axi-cel and better than what liso-cel and Breyanzi brings.

Yes. It seems like it could be a real innovation as it relates to autologous CAR T where you already have these CD19s, but you could displace them with this dual antigen approach. You touched on the safety and efficacy profile, but maybe can you dive a little bit more deeply into what you've seen so far in the clinical results with ronde-cel? And what has you excited about the 2 ongoing pivotal studies?

Sure. So very much so. So, this product was designed with a specific outcome and intent. And in fact, that's exactly what we're seeing in the data. We're seeing this in translational data that we presented at ASH last year, really showing very nice cell expansion, long persistence and duration of response. But most importantly, when we presented data at ASH last year, we had a 76% complete response rate in patients with third or later line disease, patients who have been failed by 2 prior lines of chemotherapy. That's important because if you look at the CD19 CARs, they have in that line of therapy, about a 50% complete response rate. So a substantial improvement. And then what really got us a lot of attention is the median progression-free survival that we presented last year was 18 months. And that, again, compares very favorably with what has been presented for the CD19 CARs, which is 6 to 7 months of median progression-free survival. So again, it's pulling through this longer duration of response and more complete responses.

And maybe very briefly on the safety side of things, too. I think you've seen an improvement on the tolerability profile by hitting the dual antigen approach.

Yes. And maybe also because of the CD62L selection, we're seeing almost what we call a softer -- or I should say the investigators have told us is a softer safety profile. We've had no Grade 3 or higher CRS, cytokine release syndrome, which is a classic CAR T-cell associated adverse event. And then neurotoxicity or ICANS is also something which is seen with other CAR T-cell therapies. Our incidence is quite low at less than 10%.

And potentially a more frail patient population, too, that could be more susceptible to those. I know we go back and forth with the existing data all day, but let's talk about PiNACLE, and then we can move into the second-line study. Just to level set for those in the audience, can you describe the third line plus setting that you have -- or study that you have ongoing in the PiNACLE trial?

Yes. So we have a really thoughtful clinical development plan where we have what we call our fast-to-approval strategy. We want to be first CD19/20 on the market. It's called PiNACLE. It's a single-arm study, which is really a seamless expansion from the third-line cohort in the Phase I study. So it's just continuing on. The patients that we presented in the third line last year are part of that pivotal trial, which will continue on until we complete enrollment of about 100 patients. So that's really our fast-to-approval study. We're presenting an update in the second half of this year. And then we're going to complete enrollment and expect to have the BLA submission next year with the data -- the pivotal data being available mid next year. So we're in a really great place to have this fast-to-approval strategy. The FDA has given us Regenerative Medicine Advanced Therapy for that third-line-plus indication. But in addition, we also have a pivotal trial ongoing in the second line, this head-to-head CAR T-cell therapy trial. And so we've positioned ourselves in a very positive way. But PiNACLE is our lead program, which is, we think, going to establish us as a first-in-class CD19/20.

Yes. And as it relates to PiNACLE, you mentioned you're going to have an updated data set in the later part of this year. There is a big medical meeting that focuses on hematology called ASH. We'll see if it's there or not. I'm not going to ask you to answer that question. But when we get that updated data, what are the key metrics that you'd point investor attention to as it relates to continued confidence in the profile as you move into the final data set from PiNACLE in the middle part of 2027?

Sure. So last year, we presented about 1/3 of the patients. As I said, this pivotal trial is continuing to enroll. And so this year, we expect to present data in more than 50% of the patients, so well on our way to the pivotal data set. And what you're looking for here is, of course, consistency. Where is the complete response rate? What is the median progression-free survival? How is this product performing over time? And I think the hallmark of a great product is it performs consistently over time. So that's what we're looking for.

Is there a specific bar as it relates to overall response rate or median PFS that you're looking at internally as the critical outcome...

Well, what's really interesting is the bar is, of course, I mean, the approved CD19 CARs, and I told you their response rate in this line of therapy is about 50%. So we want something 60% or north. And I told you what we had last year was 76%. So that puts us in a good position. And for median progression-free survival, they're at 6 to 7 months, we had 18 last year. So we're well above any bar that one might set or quite frankly, that would be required for approval in this space.

Yes. I think consistency is a great way to put it in that you'll have greater maturation of the data set, too. So you have greater confidence in the numbers as you move through this readout as compared to the less mature existing data set, which is always naturally the case as drugs are developed.

Yes. And this will be really the last look at the data before the pivotal data come out mid next year. So it's going to be a really important data outcome.

And you alluded to, I think it's a '27 -- second half of '27 potential BLA and an approval in 2028. This is in the third-line plus setting. A lot of people will think that in second line, autologous CAR T is now kind of the standard of care. But is that necessarily the case? Are some people getting bridging therapy? And how do you think of the commercial opportunity within the PiNACLE setting?

Yes. So many people think that the third and later line is a smaller indication and second line is really where most of the patients are because, in fact, CAR T-cell therapy is recommended in the second line, and that's where most patients are intended to be treated. But in reality, what happens is we know from data that 50% of patients who hit the apheresis chair, the leukapheresis where they collect cells for CAR T-cell therapy, 50% of patients who receive CAR T-cell therapy today have had 2 regimens of chemotherapy. So that means they would be third-line patients and on label. So 50% of the lymphoma market today, which is about $3 billion, would be third or later line based upon having received 2 prior regimens of chemotherapy. We've confirmed this actually in the Medicare -- this was retrospective data from Memorial Sloan Kettering, but we've confirmed it in the Medicare fee-for-service claims analysis, which showed very similar results. So we believe this third or later-line population is actually quite large, and we're very excited about it. And then about 50%.

And then maybe just to round it out as it relates to the PiNACLE setting, are you also pursuing it in a broader swath of patients and that you have older patients in the trial as well, and that maybe isn't an area where the autologous CD19s have gone into quite yet? How do you think about breadth of the label in the third-line-plus setting on a relative basis?

Yes. It's always really important to compare patient populations, but this -- our product, we are -- have no upper age limit. So we successfully treated patients who are 75 and older. I think that, that's something that when you look at the randomized controlled trials for Breyanzi, for example, they didn't include any patients over the age of 75. And so that's something that we're able to do.

Great. And so the other trial that you alluded to was the PiNACLE head-to-head trial, which is quite an innovative design. Maybe just to level set, could you give a little bit more context around the design of that trial in the second line and what you're looking to achieve with that study?

Yes. Well, we call this our leave no doubt strategy because it is a superiority trial that is -- the way we believe this market is going to evolve is that our CD19/20 ronde-cel is going to displace the currently approved CD19s. And so we wanted to provide the data to ensure and leave no doubt that, that was the right decision for physicians and for patients. And it's important to note that in this marketplace, the physicians who prescribe CAR T-cell therapy are, of course, very data-driven. They are loyal to CAR, but they will switch CAR T-cell therapy based upon data. And we know this from the lymphoma marketplace where Yescarta or axi-cel used to be the market leader, but they have lost substantial market share to Breyanzi or liso-cel as Breyanzi has a better safety profile. So based on that better safety profile, physicians are changing. We know in myeloma -- multiple myeloma, for example, that Abecma was the market leader, but when Carvykti came on the market with a much better efficacy profile, physicians switched. Well, now we intend to bring ronde-cel to the market with better efficacy and better safety. And so this is a place where we believe that with the third-line data set and then the randomized controlled head-to-head trial, we'll be able to switch out the CD19 CARs. And when you think about it, once ronde-cel gets into place in these centers, we've got a 76% complete response rate, assuming that data holds with this very long duration of response and no Grade 3 or higher CRS, it's going to be very hard to displace us. And so that's why the fact that we're first-in-class is so important.

You're potentially consuming all of the headroom. You're really moving the standard of care forward and standard of care has progressed meaningfully with these cell therapies over the last 5, 10 years. As it relates to PiNACLE head-to-head, you say it's the leave no doubt strategy. What do you expect the comparator arm to be comprised of? I know you mentioned that the market is shifting towards Breyanzi from axi-cel, do you have any thoughts on the early composition of Breyanzi versus Yescarta?

Yes. It's a little bit hard to say definitively because, of course, as we said, market share is shifting. So we expect to see more Breyanzi use. Our footprint is largely in the U.S. We also have sites in Canada and Australia. We think the majority of the patients will be Breyanzi, but with a substantial share from Yescarta because we do have U.S. sites that are very much Yescarta users as well as Canada and Australia. So we think it will be a mix, but with a little bit of preponderance with Breyanzi, which is great. And I think this is a real-world study where physicians were going to be studying this product to bring physicians meaningful data, which represents what they're doing in practice today because most centers use both products and they select the product that they're going to use based upon the patient that's in front of them.

Yes. And one of the questions I get on the PiNACLE head-to-head study is that it's a very innovative trial, but it's a lot of cell therapy and cell therapy costs a lot to produce and that you have a cell therapy control arm and the cell therapy active arm. It's very innovative in that way. Can you talk a little bit about the measures you put in place to mitigate cost of the trial and some of the insurance preauthorization that you have and enrollment criteria here?

Sure. So we have designed this trial to be very much as we were just talking about, according to standard practice. The comparator arm, Yescarta or Breyanzi, depending upon what the investigator chooses, is on label for the product. And so that arm is reimbursable, the product, the administration. In fact, in many cases, the adverse events are reimbursable under Medicare or even commercial insurers because it's a well-designed clinical trial using product on label. And so that's been a substantial help to us. Of course, we're paying for study infrastructure for both arms, but this really helps defray the cost of the trial.