Precigen, Inc. (PGEN) Earnings Call Transcript & Summary

I think we can get started. Good afternoon, everyone. It's a great day to be indoors today. Welcome to the Precigen presentation at the 41st Annual JPMorgan Healthcare Conference. My name is [indiscernible], and I'm from the JPMorgan Healthcare Investment Banking Group. It's my pleasure today to be introducing you to President and CEO of Precigen, Helen Sabzevari. Before we get started, I just wanted to highlight 2 ways to submit questions. For those of you online, feel free to submit questions on the webcast. And for those of you joining us today in person, we'll be hosting a Q&A session after the presentation in this room. Thank you. Over to you, Helen.

Thank you so much. Thank you very much. First of all, I wanted to thank the organizers at JPMorgan, and it's great to be back in person this year. So with that, also I would like to start the presentation. And before I start at actual slides, I would like to mention that the -- I'm making some forward-looking statements and -- which are captured in this slide, and you can also look at our SEC disclosure. Well, in regard to Precigen, we are a cell and gene therapy company that we have really focused on 2 major platforms and have differentiated ourselves from the rest. One is our UltraCAR platform, which is an overnight manufacturing platform. And it's quite differentiated and change the paradigm of manufacturing. The other one is our AdenoVerse immunotherapy platform which is a gene therapy platform that actually allows the immune system to educate itself internally in the patient and then you develop the specific immunity for various indications. We believe at Precigen that in 2023 is a transformational year for us in the sense of really advancing our programs in the clinic and specifically 2 programs that I would be highlighting here that have a possibility to -- for the rapid movement from regulatory pathways and also towards the commercialization. With that in mind, in the next slide, we are looking at our clinical pipeline. Clearly, we are a company that has a number of short term goals. And we have advanced the program on our UltraCAR-T programs in the clinic from Phase I to Phase Ib both in hematological and solid tumors. And our AdenoVerse platform, we have advanced 2 programs to Phase II in the past 3 years since the inception of the Precigen, and both in HPV specific, cancer indication as well as in PRGN-2012, which is in our recurrent respiratory papilloma and I will go through these programs more. Every year, we have a tradition offsetting our goals for the year to come. And after we finish the year, we look at what did we accomplish actually in that setting. And as you can see here, for Precigen, 2020 has been a great year. We have a significant clinical advancement in our portfolio. On our UltraCAR-T platform. As you can see, our PRGN-3006, we presented the data at ASH, a positive safety and efficacy data. It's quite exciting by our investigators and the attention that was received. And we have moved to Phase Ib. In our PRGN-3005, which is our UltraCAR in ovarian cancer and solid tumors, we also achieved -- finishing the Phase Ib actually both arms because of the preliminary data that we have on the efficacy. FDA allowed us and cleared that we moved to an arm of IV injection and bypassed number of doses and also go to redosing and lymphodepletion. So we are very excited about this. And we did the tech transfer of our next-generation PRGN-3007, which currently enrolling patients. In regard to our AdenoVerse platform, I would like to highlight our PRGN-2012, which targets the recurrent respiratory papilloma patients. In this platform, I just want to give a little bit of history. We started the IND and the trial in April of 2021 in the midst of COVID. We finished the Phase I and expansion cohort by December of 2021. We have started the Phase II in 2022. And up to this point, and I will report on that, we have expanded, and we are very excited about the data that we will be showing in January. And finally, our PRGN-2009, which we have done the enrollment and dosing has been completed in the Phase I mono as well as in combination therapy and we have moved to Phase II on in a newly diagnosed patient with head and neck. On the corporate side, this has been very exciting for us because we had a overhang of $200 million convertible notes by the sale of the subsidiary of our Trans Ova, which we maximize this value. We basically were able to cover the convertible notes. The deal was for $170 million upfront and $10 million upside. And I'm happy to report that up to date, we have actually retired $157 million of that debt and have sales close to $6 million in savings. So we have taken care of that overhang, basically. And that's very important for our company and for our investors. Talking about our UltraCAR platform. And the reality is there are lot of companies that they are in this field, and they talk about each one of them a differentiation. I don't know how many of you were at ASH but I think it was a really awakening moment for everyone because there is a hype around -- everyone had realized that manufacturing is the issue. We realized this 4 years ago, when we started actually really putting the platform that we refer to as UltraCAR together to address the issues that the field were facing at that time. Over the years, as it became more evident how difficult the manufacturing has been and the cost of classical CARs, classical TCRs, and there were a huge hopes for off-the-shelf. People started saying, yes, we are developing and manufacturing rapidly 2 days, 1 week, so on and so forth. And as an article that came out at ASH and also in discussions with the KOLs of some of these trial, it became evident that actually this was a hype. And unfortunately, the -- neither the manufacturing time were reduced that much or the costs were reduced. So with that in mind, in the next slide, this is a direct comparison of our platform and why we really use the term paradigm shifting. That's a term that I know is very chic. A lot of people use it. And what we need to address is when you look at our UltraCAR versus Autologous CAR-Ts, or off-the-shelf Allogeneic, we truly manufacture overnight in 1 day, from the T cell separation to the infusion of the patient is 24 hours. Not a week, not 2 days, not 10 days, not 50 days, 24 hours. And we believe we are the only company that currently is capable of doing that. And this is not a hope and a dream to do. This is currently happening across the sites in U.S. We have multiple sites at Moffitt, Mayo, Fred Hutch, University of Washington and a number of other sites that are joining as we speak, to be running this. The quality control release assays are done on the same day of the release, the same day of infusion, which is overnight after we have used -- produced our UltraCAR. And obviously, because we don't do any centralized manufacturing and expand manufacturing for weeks outside, you can imagine that our cost is significantly lower than the others. So I just wanted to show this slide and make it very clear. When everybody talks about fast CARs, rapid, vein to vein, ours is the only one that has 1 day manufacturing and next day infusion. This is the process that currently our patients are going through in hospitals. I would like to highlight that no one from Precigen is present at these centers. So our manufacturing is not at the hospital. This is done at the clean room of the hospital with technicians at the hospital doing this. The T cells are separated. They are using our nonviral system, and that is the reason that we can do this in a hospital. They have been transfected by usage of our ultra operator. In discussions that we have had with the FDA, we developed this device ourself in order to be able to scale up and for commercialization, you can transfect 4 billion T cells under 12 minutes using this ultra operator. And then these cells, this is a semi-closed system that the bag is left overnight. There's no activation. There's no addition of cytokine. There is nothing to be done to next day, the cells are QCed and infused back to the patient directly within 24 hours. And we have a mechanism here, our membrane-bound IL-15 that allows actually majority of expansion and persistence of these cells which I refer to a second point of the manufacturing directly in a patient as opposed to be in a centralized manufacturing facility. So with that in mind, I would like to take you through some of the work that we have done. First of all, our PRGN-3006, which addresses the AML patients. Why AML patients? These patients they have very few months to live. None of these cell and gene therapies really have the ability to get to these patients as fast, especially the classical CAR-Ts. And this is, I think, it's a very telling slide in comparison of our platform versus what the other platforms are. So on the left-hand side, this is the expansion and persistence of our UltraCAR-T that targets CD33 for the AML patient. First of all, I'd like to take -- pay attention to the scale, the logs of expansion that you see in the left-hand side, also the doses. We have doses as low as 4 million and the top dose that we have was up to 83 million. One dose was given. On the right-hand side, this is the 2 major off-the-shelf that in a AML patient population. On the top, you see that they are giving 1 billion cell 3x. And now actually, this company has gone up to 3 billion. And on the lower half, also, you have 3 doses of 300 million, so close to 1 billion. But please pay attention to the expansion of these cells but more importantly, persistent of these cells. You spend hundreds of thousands on the manufacturing of this, come up with billions of cells, you put them in a patient and at the end, 20 days or less than that, the cells are gone. And this is, by the way, in an exact patient population in AML patient population. So this shows the strength of the platform, our UltraCAR platform and overnight. Not only we can manufacture it overnight, these cells are capable of expanding and persisting directly in a patient. The next question comes, are they biologically active? And we showed this data at ASH, which was received extremely well. You can see on the left-hand side, given the dose levels as low as 4 million cells, we have 9 out of our 15 patients, 60% of the patients. They had a decrease in a bone marrow blast. On the right-hand side, you see the objective responses from our Phase I dosing. And you can see that almost 30% of these patients, they had objective response, complete response, or partial responses. And one of them that chose to bridge because usually these patients, they don't receive any transplant, they are not eligible for transplant, has been now living close to 2 years post UltraCAR-T receiving it and is doing perfectly fine. One other important factor here is the safety. These UltraCARs have a very, very favorable safety profile as compared to the others because it's regulated in such a fashion that you don't introduce billions, you don't see those issues that you might see in a classical thing. So with that, we are very excited, and we are expanding. Now we are in Phase Ib and moving this for the efficacy. I should mention, because of the safety and preliminary data that we have shown the FDA has granted us the fast track in this. Now on to our PRGN-3005, which is a solid tumor. To be honest, majority of people in the cell and gene therapy don't even get close to the solid tumors because there has been 0 success. So again, we have targeted the MUC16, the unshared portion of MUC16. And you can see on the right-hand side, very similar to what you saw in the PRGN-3006, the expansion kinetic as well as the persistence in these patients, which is quite compelling. But more importantly, it's the clinical activity and the safety that you see. We have the patients that enrolled in this trial. They have had between 6 to 9 prior failed therapy. So they are a stage 4 ovarian cancer. And as you know for the past 20 years, we haven't done at all well in this indication, 10% response rate. This is what we have after 20 years of working. And what you see on the right-hand side is the scan of some of our patients baseline we're pointing to their metastases. This patient received 7 million T cells intraperitoneal, that's all. One dose, no lymphodepletion. And you can see that there was a complete response in metastasis. Similarly, in the second case study, this is a partial response on the lesion, and this was a large lesion in bladder, which allows and actually points to the fact that these cells do traffic unlike what everyone said that CAR-Ts don't traffic. They don't traffic classical ones because they die before they can traffic because they are exhausted. These cells, on the other hand, they are more stem-like. And you can see that obviously, there is effect and there is a change in the sum of all the diameters of target lesion, which is very exciting, and that has allowed us to move into the next Phase Ib. Now on to our AdenoVerse platform, which is also a very exciting platform. I would like to show you a video for a minute. I think that explains how this works much better than I can do it and I can do it justice. So for those online, I apologize you hear it, but we will have this basically video on our website and through YouTube will be available. [Presentation]

So as mentioned -- Okay, sorry. As I mentioned, we have obviously full IP around this platform, which is quite unique and differentiated than the others. And we have applied it to develop PRGN-2012, which targets HPV 6 and 11 for the recurrent respiratory papillomatosis. This is a disease that is rare disease with papilloma reoccurring continuously in the air way as well as on vocal cords. Patients -- some of the patients, they go through hundreds of surgeries through their lifetime. And on January 24, I'm really excited to say that we will be presenting the data from the first 15 patients from the RRP, with the full follow-up of 1 year on safety and efficacy and the clinical translational data. And we are really excited about this and Dr. Allen, our investigator, will be presenting this on January 24. So with that in mind, in this slide, you see exactly on left-hand side, I don't think I have to say that much. You see that issue that these patients have. A regular airway trachea on the right-hand side what you see with this papilloma, these patients, they have to go through surgery to just be able to breathe. And there is no treatment for them whatsoever. So with PRGN-2012, we have been able to treat these patients. The market and the number of the patients worldwide -- in U.S. there is an estimation up to 25,000. We have taken a sort of conservative estimate of 10,000 adults and 6,000 juveniles in U.S. and the projected market for this in U.S. is over $1 billion. In ex U.S., approximately, again, we only have numbers, approximation for the adult is 60,000 cases. And globally, we -- our researcher studies have shown that the market will be close to 2 billion. Of course, these are based on the estimates that we have. The majority of issue with these patients since there is no other treatment than surgery, it's the cost of surgery per year for these patients and indirect costs that the patients have to recur because a majority of these patients actually cannot work. They can't use their voice. And every surgery actually makes their situation worse because of a scar tissue that's developed continuously. And for that reason, this is even as a rare disease is extremely important unmet need, and we are really excited that we can provide a treatment for this patient population. And here, in November of '21, we show a case study, whereas in January of '23, we will show a full Phase I and expansion cohort of 15 patients. But you see from the baseline of the patient on the left and then after treatment. Obviously, at that point, we had a short follow-up and now all of our patients that we will be presenting, they have been follow-up for a full year, and we will be presenting that data. And on the right-hand side, you see that this off-the-shelf in a vaccine does exactly what it's supposed to do, initiate and expand specific HPV T cells and the basically red, green and yellow that you see, these are T cells that -- they are inside the papilloma, which they didn't exist before. And that's the mechanism. So with that in mind, we are looking forward to our presentation, R&D presentation on January 24,, with Dr. Allen. And finally, we have used our AdenoVerse platform in PRGN-2009 targeting HPV 16 and 18, which is prevalent in all of the HPV indications, especially cervical, head and neck, anal. And as you see on the right-hand side, the disease a snapshot, this is 5% of all cancers. They are estimated of 690,000 cases and the estimated market opportunity growth for all the treatments in this field by 2030, it's estimated at more than $10 billion. So what does that mean for our PRGN-2009? What you see was we started a Phase I and Phase II study, and we have reported on a mono Phase I, which we had patients that had stable disease for almost 2 years. But more importantly, when we went to the patients that they have failed checkpoint inhibitors. And by the way, for cervical cancer, for head and neck, checkpoint inhibitors are the treatment and the efficiency, 15%, 85% of women with cervical cancer fail. Head and neck is 18%, 82% of the patients they felt this. So what we did, we positioned the PRGN-2009 in this checkpoint inhibitor failure patients, and we follow them. And you see the numbers, we had a 40% overall disease control. These are stage 4 patients that they have failed everything. And then you can see that we had a 30% objective response. In cervical cancer, 2 out of the 2 patients that they enrolled, they showed objective responses and in head and neck, 1 out of the 7. But interestingly enough, we had durable responses. We have CR and PRs and our CR actually, one of the patients, as you can see, is up to 400 days post injection. And we have the scan that shows that this complete reduction of the tumor in this scan. This is quite exciting because currently, again, for this patient population and a large indication, there is really nothing out there. And by the way, PRGN-2009, very similar to PRGN-2012, extremely safe. These patients, they have received upwards of 16 injection per month. Every month, they have received 1 and safety looks very similar to the what the flu vaccine that you get looks like, some rash, some fatigue and then you're fine. And we have reported on a preliminary data on a Phase Ib. This first half of this year, we will be reporting on a complete combination. So with that in mind, I would like to go to our summary and what is our major goals. I believe we have shown that we really had a very significant year in 2022 for our clinical trial and advancing it. And for 2023, we are moving in continuing enrollment in PRGN-3006 in Phase Ib across multiple centers and we expect to report the full Phase Ib data for 2024. And this is important in regard to PRGN-3006. This patient population has nothing in front of them. And for -- with the Phase Ib data and if it's a solid data, this really allows us to start the discussion in regard to a rapid regulatory path and especially that FDA has already granted us the fast track for those discussions. PRGN-3005 is very similar, expansion to Phase Ib multiple centers and expectation for the data presentation is 2024 when we have completed the enrollment and follow-up of this patient. We also initiated our dosing of PRGN-3007, and we will report on a full set of data from Phase I in 2024. As far as AdenoVerse PRGN-2012 is we will be reporting, as I mentioned, in January 24, which we are very excited about. But at the same token, we have been enrolling to our Phase II and up to date, we have enrolled close to 20 patients in our Phase II currently. And we will be finishing the enrollment in a Phase II very early on this half of the year. And we are in discussions with the FDA for a rapid regulatory path and we are moving towards commercial decision. And in regard to our PRGN-2009, which targets HPV indications such as cervical and head and neck, the Phase I monotherapy and combination therapy data will be presented in the first half of this year. And we expect that the first half of the '23 -- I'm sorry, the second half, we will be presenting the interim data from our Phase II monotherapy in a newly diagnosed head and neck patients that we have. So with that, I'd like to thank the audience and the organizers for allowing us to present our advancement of our portfolio.

Thank you, Helen, for such a great presentation. I just wanted to remind those online, please feel free to submit your questions through the webcast. So before I begin passing it over to the floor, I just want to kick off with a few questions. Helen, you mentioned the AdenoVerse platform and showed us a very informative video, and mentioned about the virtual R&D that's coming up on January 24. I'm sure we're all very excited about that. Can you just provide us a little more sort of details on what to expect for the upcoming readout?

So for our PRGN-2012 we actually waited until the last patient from the cohort meet the 12 months because we did not want to present a data that is not a complete set. What we will be presenting is that every single patient pretreatment, the history and number of surgeries that they have versus post treatment and how our treatment has affected that, reduced or eradicated it. At the same token, we will present the full safety, efficacy and the translational science of that. And this is presented by Dr. Allen, which is a world renowned in this field, and he will be presenting the full set of data and 15 patients in a rare disease. This is a very respectable number of patients because we are not talking about the oncology that we have hundreds of thousands of patients. So that would be very, I would say, highly relevant number of the patient for this kind of disease.

Just a follow-up question. You recently gave a data update on the sort of AML CAR-T, which is very helpful to understand your ongoing sort of clinical progress this is understood to be a very clinically challenging population. Can you just provide a little more details on your update? And then what the significance of this is?