Marker Therapeutics, Inc. (MRKR) Earnings Call Transcript & Summary

Hello, and welcome to the Marker Therapeutics First Quarter 2021 Operating and Financial Results Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CFO, Tony Kim. Please go ahead, sir.

Thanks, and welcome, everyone. The press release reporting our financial results is available in the News section of our corporate website at www.markertherapeutics.com. As a reminder, we will be making forward-looking statements regarding our financial outlook in addition to regulatory, product development and commercialization plans and research activities. These statements are subject to risks and uncertainties that may cause actual results to materially differ from those forecasted. A description of these risks can be found in our most recent Form 10-Q and 10-K on file with the SEC. I would now like to turn the call over to Peter.

Thanks, Tony. Good afternoon, and thank you for joining us today. I'm pleased to say that we're off to a productive start to the year. During the first quarter, we completed a $56.5 million public offering of common stock that will support the continued growth of our pipeline, and we're making steady progress on both the clinical and the manufacturing fronts. In March, we treated the first patient with MT-401 in the safety lead-in portion of our Phase II trial in post-transplant acute myeloid leukemia, or AML. This is a significant milestone for us as it is our first company-sponsored trial with MultiTAA therapy, but also a critical first step towards developing what we believe could be a potentially transformative therapy for these patients who, at present, have only a 25% chance for surviving 5 years. We currently have several sites open and enrolling, and our clinical team is hard at work getting additional clinical sites online. Our Chief Medical Officer, Dr. Mythili Koneru will provide further details surrounding our AML trial in just a moment, and we look forward to taking your questions at the end of today's call. In parallel with the clinical developments, we continue to optimize the MT-401 cell therapy manufacturing process as we prepare to operationalize our new in-house manufacturing facility in the first half of this year. In brief, we're excited to explore how these modifications can be applied across our MultiTAA therapies and could potentially result in an increase in the number of T cells available for patient administration, amongst other benefits. Our Chief Development Officer, Dr. Juan Vera has joined us today to provide a lot of details about the important process improvements that we've implemented. We look forward to completing the technology transfer from Baylor College of Medicine and manufacturing in-house all of the study drug for our AML trial and future trials. This year, our primary focus is on completing treatment of the patients in the safety leading portion of our AML study with MT-401 and enrolling patients in the Phase II portion of the trial. As you may recall, our cell therapy was designed to address the shortcomings of current treatments while maintaining patient safety. Many cell therapies in development today are pursuing single or even dual targets. However, this approach has demonstrated little -- limited improvement in patient outcomes. By contrast, we believe that our multi-antigen approach has the potential to reduce a lasting antitumor effect by allowing the patient's own T cells to expand and kill cancer cells alongside our therapy. By targeting multiple antigens and epitopes present within the tumor, we believe that our MultiTAA T cell therapy can effectively address the tumor head of the geneity, while recruiting the endogenous immunity that amplify the immune response through epitope spreading. At this time, I'd like to hand over the call to Dr. Mythili Koneru, our Chief Medical Officer, to review details of our Phase II trial and our progress to date. Mythili?

Thank you, Peter. As you just heard, this has been an important quarter for us as we dose the first patient within the safety leading portion of our Phase II trial in post-transplant AML. Just as a reminder, we plan to enroll approximately 6 patients in this portion of the trial. 3 patients will be dosed with MT-401, our lead product candidate manufactured with a legacy reagent, which was used in the Phase I trial conducted by our partners at the Baylor College of Medicine. The remaining 3 patients will be dosed with study drugs manufactured using a new reagent from an alternative supplier. Our clinical operations team has made considerable progress on getting sites open and have currently 9 sites activated. Additionally, we plan on opening approximately 20 sites in total for the Phase II portion of the study and anticipate being able to treat the first patient in the main portion of the protocol in Q3 of this year. MT-401, which was granted orphan drug designation in post-transplant AML has been well tolerated in an ongoing Phase I clinical trial conducted by our academic collaborators at Baylor College of Medicine in the setting. Overall, results showed that MT-401 was well tolerated with no incidence of cytokine release syndrome, neurotoxicity or grade 3 to 4 GvHD in the post allogeneic setting and demonstrated an antitumor effect with significant in vivo expansion of T cells. [ Embrace ], as reported in a recent publication by Lulla at all in December 2020, 11 of the 17 patients in the adjuvant disease setting dosed with MultiTAA-specific T cell therapy after receiving an allogeneic stem cell transplant never relapsed. Median leukemia free survival, or LFS is not reached at a median follow-up of 1.9 years. With 11 of the 15 patients remaining alive, estimated 2 years overall survival of 77% at a median follow-up of 1.9 years post infusion, which compares favorably with transplant outcomes for risk mashed AML MDS patients post-transplant. Additionally, 8 patients were treated for active disease that was resistant to salvage therapy post-transplant with the median of 5 prior lines of therapy. The range was 4 to 10. 2 of the 8 patients achieved objective responses with 1 complete response and 1 partial response, with 6 patients continuing with stable disease, some of which had reduction in tumor burden. Now based on these results, we are optimistic about MT-401's potential in this patient population. To briefly recap, this multicenter AML study will be evaluating clinical efficacy of our product in patients with AML in both adjuvant and active disease settings, following an allogeneic stem cell transplant. In the adjuvant setting, approximately 120 patients will be randomized 1:1 to either MT-401 at 90 days post-transplant first standard of care observation, while about 40 patients with active disease will receive MT-401 as part of the single-arm group. The primary objectives of the trial are to evaluate relapse-free survival in the adjuvant group and determine the complete remission rate and duration of complete remission in active disease patients. Additional objectives include for the adjuvant group: overall survival; and graft-versus-host disease relapse-free survival; while additional objectives for the active disease group include: overall response rate; duration of response; progression-free survival; and overall survival. And with that, I'd like to hand the call over to Dr. Juan Vera, our Chief Development Officer.

Thank you, Mythili. In parallel to the progress we have made on the clinical front, we continue to work on simplifying and streamline our manufacturing process while improving the T cell phenotype and antigen specificity of the final drug product. We believe these improvements may have an impact on the clinical performance of the drug product in our Phase II clinical study. These manufacturer optimizations fall under 2 major categories: technical and biological improvements. At present, we have incorporated several technical improvements, including: first, a 50% reduction in the manufacturing time, resulting in a 16 days manufacturing process, decreasing in this manner, the vein-to-vein time while improving the manufacturer throughput. Second, a decrease in the number of technical interventions by approximately 95%, reducing in this way, the risk of contaminations. Third, an improved manufacturing process, which will reduce the risk of manufacturing failures. And 4 and final, despite the reduction in the manufacturing time, we are able to produce sufficient cell numbers to patients in the current clinical study. In addition to this technical improvements, we are now capable of producing a final drug product with a more favorable cell phenotype, upgraded magnitude of antigen specificity and a broader targeted recognition profile. We believe the combination of this technical and biological improvements might result in a clinical benefit in the upcoming study in AML. Importantly, these CMC changes have already been approved by the FDA and are currently implemented in the safety leading portion of the clinical study. With that, I will turn the call back to Tony, our Chief Financial Officer to review the financials. Tony?

Thanks, Juan. We ended the first quarter with $64.5 million in cash and cash equivalents. We expect that our current cash balance will support operations into the first quarter of 2023. Net loss for the quarter ended March 31, 2021, was $8.8 million compared to a net loss of $6.5 million for the quarter ended March 31, 2020. Research and development costs during the 3 months ended March 31, 2021, was $5.6 million compared to $3.8 million during the 3 months ended March 31, 2020. The increase of $1.8 million was primarily attributable to increases in headcount-related expenses and infrastructure expenses due to growth of research and development operations. General and administrative expenses were $3.1 million during the 3 months ended March 31, 2021, compared to $2.8 million during the 3 months ended March 31, 2020. At this time, we'd like to open the call up to questions. Operator?

[Operator Instructions] Our first question today is coming from Joe Catanzaro from Piper Sandler.

Maybe just 2 for me. So with regards to the safety lead-in in those 6 patients, just wondering if we should expect any disclosures from you once that part of the trial has been completed? And if so, what should we -- what could we expect to hear out of those 6 patients?

Sure, Joe. That's a great question. Let me turn that over to Dr. Mythili Koneru, who can talk about the safety lead-in.

Yes. Thank you for your question. Regarding the safety lead-in, 6 patients, the primary objective is obviously safety. So we'll be looking specifically at dose-limiting toxicities. In terms of timing, as we've mentioned, we are looking on track to completing the safety lead-in for the 6 patients mid this year and to open up the main portion of the Phase II. We -- you may anticipate a potential announcement for when the main 2 -- main portion of the Phase II is opened potentially. And then the safety lead-in for the dose-limiting toxicity has been cleared safely.

Okay. Got it. That's helpful. And then maybe quickly, my second question. Peter, you noted that the optimized manufacturing process generates a greater quantity of T cells. Is there any possibility or thinking that the main portion of the Phase II could use higher doses of 401 than what's being used during the safety lead-in? Or should we just be thinking more along the lines of improved T cell phenotype and antigen specificity?

Thanks, Joe. That's a great question. I think that we are very optimistic about what effects we might see from the improvement in the manufacturing process. But let me turn that question over to Juan, who is closest to the CMC and process improvements that we've implemented.

Sure. Yes. We actually feel very comfortable with the improvement that we have seen in the final product in term of the analytical comparison, right? And I'm referring specifically to the comparison in regards to the antigen specificity and the cell phenotype. Both we have shown that the current -- the new process is able to yield a product of greater analytical characteristics. So from that, I think that the product that will be manufactured for the ongoing study should yield a product of biological characteristics that would be superior to what we initially tested in the Baylor studies. In regards to the question on the cell dose, this new manufacturing process opened that opportunity, right? I think that now being able to simplify the manufacturing process and also being able to increase the overall cell numbers will give us the opportunity to explore even higher sales. With that, maybe, I don't know if Mythili wants to comment in term of the prospects of doing a higher cell dose in the clinical setting? My?

Thank you, Juan. The Phase I AML and [ ESA ] that was done at Baylor College of Medicine has been exploring higher doses and shown them to be safe. So there is an opportunity for us to increase the dose in the main portion of the stage 2 based on that data and to do so without necessarily doing any additional safety readings per se.

Our next question today is coming from Kristen Kluska from Cantor Fitzgerald.

And I like the new look of your website. I wanted to first ask, with all of these manufacturing, technical and biological improvements that you laid out, how are you thinking about how this could impact the cost and time savings on a larger scale? And then do you believe that this process could be utilized long term? Or will you continue to look at other items?

Thanks for the question, Kristen. Let me turn that over to Juan.

Thank you. That's an excellent question. We -- although we don't necessarily highlight that aspect, I think that the new simplified manufacturing process should have a significant impact in term of yield in some more economic final product that mainly result from a reduction in the overall sort of culture tone and the overall simplification and decreasing the number of interventions. So without a doubt, that is going to have a positive impact in the cost of the final drug product, right? And -- but I have to highlight that we are aware that there's still aspect that can be further improved in the manufacturing process. I believe what we have here is something that is a very solid and -- a very solid manufacturing process that will be suitable for even future commercialization. However, it gives a very strong foundations from this process to be optimized and to have a close system and to incorporate certain elements that will allow optimization of this process to simplify and speed up some of the components itself in the manufacturing. So to summarize, I think that I agree that with your statement that this simplification has an impact also in the economics, not just in the biology. And I think that this basically now has a very strong basis for future areas of improvement that I will consider at this point will be minimal, but nevertheless significant.

And yesterday, you had a poster presentation with some comments from Dr. Smith at ASGCT with ABB, evaluating the potentials of the robotics implementation. So I wanted to ask, based on these early findings, if you could discuss if you're looking to further expand on this collaboration? And what any next step might look like?

I think we're very excited about the collaboration with ABB. I think that what we're finding is that with the implementation of robotic technology, we can improve the consistency of the manufacturing process, which is extraordinarily important in cell therapies. But Juan, I think that your comments here would be valuable.

Sure. Thank you, Peter. I completely agree. Without a doubt, an area of high variability currently in the field associated with this generation of these patient-specific products is still rely on the operator, right? They definitely an inherent variability from this statin material. But I think that by being able to incorporate our robotic process, you're basically removing in the future a potential unknown, right, which basically is the addition of variability from the operator itself. So I think that this is something that, as Peter mentioned, we're really excited about the collaboration with ABB, and we're looking forward to continue working towards the integration of a robotic process in the manufacture of MT-401. And we believe that this is something that could really transform a process and making it more suitable for future commercialization. So we're really excited about the line of work.

And then the last question I have is that while I know you're focused on AML, could you talk about how you're thinking about any next potential indications to bring in-house based on the BCM proof of concept? And maybe specifically, what are going to be some of the key decision criteria?

Mythili? I think that this is appropriate for you.

Thank you, Peter. Thanks for the question. Yes, absolutely. I mean, I think you're right in the sense that we have been working very closely with Baylor and to follow and understand the Phase I data very closely so that we can appreciate where the opportunity lies in terms of unmet need for a patient population and where the data is really taking us. Obviously, the pancreatic cancer data was presented last year at ASCO and continues to look promising. So I think this being an allogeneic IND for the AML, we're obviously looking at other indications in the autologous program to move forward, including pancreas and potentially other indications. It's really trying to see where the data leads us and where the unmet need is and finding the appropriate time to do so.

Yes. Kristen, obviously, we think that the lymphoma data is quite striking. And we believe strongly that the pancreatic results are continuing to accrue evidence that the MultiTAA therapy is driving a meaningful therapeutic benefit for those patients with pancreatic adenocarcinoma. However, I would ask you to just bear with us because at this point, I don't think that we have -- we've officially announced further plans beyond our AML study. And that is currently where our focus is, is driving enrollment in that study.

Our next question today is coming from Matt Biegler from Oppenheimer.

Yes. I'll tag on to that last one. Peter, can you give us an update on where Baylor is in their own AML trial? I think My mentioned, the trial was testing a higher dose of MultiTAA. Any idea when we might see updated data from that trial or any of the other Baylor trials for that matter?

Yes, that's a great question, Matt. Thanks for the question. Let me turn it over to Mythili, who coordinates and talks to Dr. Premal Lulla, our primary investigator at Baylor on a fairly consistent basis for the latest update on the dose escalation portion of the Baylor Phase I trial.

Thanks, Matt, for your question. So if you look at the recent publication of -- from that group from Dr. Premal Lulla on the Phase I AML MDS study, there was some data included on some of the higher dose levels in that paper. So I think they are nearly complete with that last dose level. So that paper, I think, more or less, is up to date on the current status on the 2 additional dose cohort. And I think it's a very close completion of that last cohort with the highest dose.

I'm sorry, Matt. My understanding is that Baylor was set to complete the last dose as -- the last patient in the dose escalation phase, the dose level 5 last year, but due to disruptions because of COVID. They're still in the process of finding a patient to replace the patient that they had originally planned to treat, but we're unable to because of coronavirus.

Yes. That makes sense. I'll have to check out that publication. I had a quick follow-up on manufacturing. Just any plans to present side-by-side comparisons of the drug product manufactured with the new approach versus the old Baylor approach?

Yes. Let me direct that question to Juan.

Thank you. Yes, that's actually a good point. We feel really proud on the progress we have made on the manufacturing front. And actually, we're presenting a small snip of that information on the ISCT meeting and ASCGT. So the poster is really focused on how we can best improve the manufacture of MT-401, where we disclose the collaboration with ABB incorporating a robotic process. However, I encourage you to look at the results where we actually disclosed some information in the first part of the work, which is geared towards simplifying the manufacturing process. And there, you will be able to see the impact from a biological standpoint when we compare the old and the new manufacturing process.

Your next question is coming from Tony Butler from ROTH Capital.

Yes. Peter or Mythili, you made a reference to the first 6 patients, in which case you would look at the lead-in portion of the study, in which you would look for some side effects that may occur from one -- from one group versus the other group, one of the 3 patients versus the other 3 patients. And the question is, is there any other biological data that you need to feed to the FDA to actually demonstrate that there's really no difference between the 2 particular reagents that are being utilized? And effectively, 3 patients from 1 reagent versus 3 patients from the second reagent are literally identical. And I'm curious what that biological data might be.

Sure, Tony. Let me turn the question over to Mythili, but let me start by clarifying something, which is that the patients in the safety lead-in are being primarily monitored for safety. That is that none of them has dose-limiting toxicities. And that is the primary endpoint for these 6 patients in the safety lead-in. But from a practical standpoint, we won't be doing anything meaningfully different with these patients and we will be for the patients that will be enrolled in the official Phase II. So with respect to efficacy, if we see efficacy from these patients, we will plan to continue to monitor and report them just the same way that we would the Phase II patients. But Mythili, why don't I turn it over to you for the technical answer to Tony's question?

Yes. Thank you for your question, Tony. And Peter is exactly right. We're really only focused on the dose-limiting toxicities that will be reported to the FDA, if any issues arise. We don't anticipate any differences in terms of the safety profile between the 2 cohorts. And beyond that, there's really nothing additional that we need to report to the FDA. So in terms of other biological data, that's already in terms of the reagents, manufacturing and similarities, all of that has already been provided. So it's really just this last piece of safety data that will be provided before opening up the main portion of the Phase II.

Thanks, Mythili. Yes, Tony, that's a distinction that is sometimes lost and that the safety lead-in is really only intended to ensure that there are no DLTs from the product, but the issue of comparability has already been settled with the agency.

We've reached end of our question-and-answer session. I'd like to turn the floor back over to Peter for you further closing comments.

Thank you all for joining us today here on our first quarter earnings call. We appreciate your support, and we hope that you all stay safe and well during this pandemic. Have a nice evening.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.