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

Good morning, and welcome to the Precigen Business and Clinical Update Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Steven Harasym, Head of Investor Relations. Please go ahead.

Thank you, Anthony. We are joined today by Dr. Helen Sabzevari, President and CEO of Precigen. Before we begin, I'd like to remind you that during today's call, we will make various forward-looking statements. Investors are cautioned that our forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results or outcomes to differ. Please read the safe harbor statement contained on our company filings as well as risk factors in our most recent SEC filings. Helen, I'd like to turn the call over to you now. Thank you.

Thank you, Steve, and thank you to all joining us on the call this morning. I'm going to begin by giving you some thoughts on what we consider to be a very important corporate development for Precigen. I will also say that the details of the amendment will be available in an 8-K that will be filed in the coming days. With that in view, what I would like to do is just dive in about this development of regaining our rights for CD19, BCMA and IL-12. First of all, I would like to address the terms of regaining this right. And I want to make it very clear that Precigen has not given any kind of money, or upfront, or any cash for regaining the rights to its original assets. As you will find out in more in the 8-K, the royalties between the two companies have been completely wiped out. And I will explain what that means for Precigen. But before I get that, let me just address why getting -- regaining CD19 and BCMA in the context of UltraCAR-T is so important and why it's so important now. The reality of this situation is that we have taken the past 3 years to advance our unique and now differentiated nonviral UltraCAR-T platform, incorporating the UltraPorator for overnight manufacturing that actually goes from manufacturing of UltraCAR-T all the way to the analytical analysis and the infusion of the patients within overnight and next day. The past 3 years, we have put a number of Phase I studies that now have shown not only the feasibility of manufacturing overnight and making us the only company that can do this at the moment, but also have shown the safety, the expansion of these cells and the persistence of these cells in a patient and leading to the promising data on efficacy, as you have seen for our AML patient population, which has led to receiving a fast track designation from the FDA. We have moved on now with our doses from a Phase I to Phase Ib and have expanded our patient population, both in hematological and solid tumors, and have advanced the platform to a number of sites. So with that view, it became very important to now have the targets that are proven, such as CD19 and BCMA, in hand because I think everyone agrees that these two targets have been approved. They worked for the patients, and they work very well, and they are rapidly moving to the front lines of the treatment for these patient populations. However, the issues that has been still paralyzing the field of the classical CAR-Ts and TCRs and off-the-shelf has remained the same. What are the issues? The issues are: difficulty of manufacturing, long period of time that it takes, the cost that is associated with the manufacturing, the large sites and standing in line to manufacture these things; and the time finally to the patient and the cost of close to $0.5 million per one shot of this. These are the realities that all of the classical CAR-Ts, TCRs as well as the off-the-shelf are facing. And this is exactly what has distinguished us from the rest, because our time to manufacturing truly is overnight and next-day infusion of the patient, the cost is much lower, and this is done rapidly, and you can deliver more than one dose. With that, it is logical now to bring back the targets that are proven. And the combination of these two, we believe, allows us a rapid developmental program for patients. So the patient can benefit from this technology with a much lower cost and with the number of doses that they might need over the years. And there has been a lot of discussion around why there is -- now that we are moving, this is -- might be a very crowded field. The reality for those of us in the drug development is simple: you can be first in a class or you can be best in a class. And we believe we have the opportunity at the moment that be best in class. Usually, the best in the class have the better safety. Usually, they combine it with similar efficacy or better and lower costs, which they can take the larger market shares. And this, we believe it will be beneficial not only for our patients, but also for our organization as well as definitely at the moment in the discussions that we have for partnership. This would help very much the whole portfolio and the discussions, because now the totality of the UltraCAR-T is under the same roof, under the same leadership development, with the same basically platform, and that's very valuable. I also would like to stress that, for instance, CD19 in the past few years, has become very evident that not only you can use this in indications such as in cancer but also now in autoimmunity. And actually, this would be the exact same CAR-T that can go in either direction. So this opens up a completely different set of not only indications and the market share, but also partnerships for us. And I think that is very valuable. And finally, what I -- other thing that I like to say about this regaining of the rights is I would like to stress, not only we have regained the rights of CD19 and BCMA, but also our IL-12. But before I go to that, we maintain our rights to use our advanced platforms with membrane-bound IL-15, for instance, in development of the public TCRs and that we can either develop directly internally or we can partner and develop with other partners. So that also stands with us. Now in regard to our UltraCAR-T platform, as I mentioned, the addition of our CD19 and BCMA, it makes our portfolio one of the largest or the largest portfolio of CAR-Ts that we span not only with overnight manufacturing to -- directly to patients, autologous UltraCAR-T with incorporation of UltraPorator, but also we go from a span of various hematological diseases to solid tumors. We -- as you remember last week, we had a press release in regard to our ROR1 CAR-T, which is -- this is the next generation that has incorporated intrinsic mechanism to downregulate the checkpoint inhibitor PD-1, which now makes the combination of PD-1 irrelevant at this point. And as a result, you will have less toxicity issues, systemic toxicities that is associated with the checkpoint inhibitor plus the lower of the cost, because now you don't need to combine with the checkpoint inhibitor. But also, this covers a large number of indication going from a hematological indication, such as CLL and BCLL and all the way to the solid tumors, such as triple-negative breast cancer, lung cancer, pancreatic cancers. And with the -- having the AML UltraCAR-T with the CD33, that is currently in Phase Ib, our ovarian MUC16 UltraCAR-T, which is in ovarian cancer, we believe we have the most comprehensive CAR-T portfolio of any other company. And this not only allows a development of sophisticated treatment for a patient with much lower cost, but it strategically allows the value of these assets for the partnerships and the discussions that we are in, and we are very excited about that. And finally, what I would like to say is in regards to our IL-12, regaining the rights of IL-12, and what does that mean for us? IL-12 over the years has been considered as one of the best molecules, especially in cancer indication. The issue of IL-12 over the decade has always been the control of IL-12. How do you control it? The IL-12 that we had developed, and especially in the context of AdenoVerse platform, the gorilla AdenoVerse platform, as you might recall, it contains a switch that can regulate, turn on and off the production of IL-12. And we now have the IL-12 that has the most amount of clinical data, both on safety as well as efficacy, that is out there. If our investors have been paying attention in the past few years, the IL-12 data, especially in combinations in HPV, has been shown indications such as head and neck, cervical cancers and so on and so forth, has become very, very prominent, because it has shown a very good synergistic effect and has advanced now to the late stages. Clearly, our -- having AdenoVerse IL-12 back under our control not only keeps the AdenoVerse platform as a whole under Precigen leadership and development, but also it adds directly to our combinatorial strength, especially as we are moving with our PRGN-2009 in the HPV indications. And this would be a great combinatorial. And as you recall, FDA has seen actually a tremendous promise for this molecule previously. So with that in mind, we believe very similar to our UltraCAR-T platform, now we have the totality of our AdenoVerse platform back under the same roof, our gorilla vectors, which, by the way, can be combined in a synergistic way with our own molecules in our platform or with others in partnership, which we will be discussing. And this allows now a number of opportunity for Precigen from that perspective. And I think with that, I hope that I have clarified some of the reasons why we moved the way we have moved and, from a strategically, what it means to have these assets back with us and move them rapidly and also in discussions with the partners.

Thank you, Helen. Anthony, we'd like to open the call to Q&A now, please.

[Operator Instructions] Our first question will come from Jason Butler with JMP Securities.

I appreciate the detailed comments there, Helen. I was wondering, can you, at this point, give us any at least high-level next development steps for the CD19 or BCMA CAR-Ts? And then just again at a high level, how you think about -- what level of priority is finding a partner for some or any of your programs?

Yes. Thank you, Jason, for the questions. Nice talking to you. Definitely, I think the priority for CD19 is high, and we will be moving this rapidly toward the clinic because of the platform that we have. And internally, we have discussed a variety of strategies that we have for the movement of the high priority programs to the Phase I, especially the CD19 upfront. As far as partnerships are concerned, as you can imagine, obviously, now we are on the radar of many, many companies from perspective of that we are the only company that, as it has become evident, especially during the December month and January month that the situations with off-the-shelf and as well as other companies, that they have had the claims around rapid manufacturing, which became evident that actually took weeks. We are standing as the only company at this moment that can provide truly an overnight manufacturing. And of course, this portfolio, it has with regaining of CD19 and especially BCMA, because that has been always one of the questions that in partnerships we receive, that do you have the ability to actually -- the treatment for CD19, because it's a proven target, and the path is already proven for a therapy at various lines and is moving very rapidly toward the frontline standard of care. And I think this allows us to have very productive further discussions, and it actually makes the portfolio as a whole without the gap and also without now having royalties to be paid, for instance, to other company. And I think this is very, very important.

Great. And then just one more from me. You made it clear that there's no cash payment associated with getting the assets back. But as you think about the additional development activities, any changes to your own [indiscernible] cash runway here?

Yes. Of course, we will be addressing in May when we will report on a quarterly, and Harry will be addressing much more in detail, we will address our cash run rate. The current cash runway, it's the same basically guidance that we have given to the late 2024. We have number of strategic actually plans. And as I mentioned, in front of us, that includes not only the discussions and partnerships that we have, but also from the perspective of strategic assets that we have, such as Exemplar that is in front of us, and that can be monetized and also even further reprioritization. But at this moment, I think we are withstanding well that we can move rapidly with our CD19 as the first one forward and, of course, followed by BCMA. And with the IL-12, we are also putting the strategies together, again, for partnership as well as the very rapid combination strategy.

Our next question will come from Jennifer Kim with Cantor.

Congrats on the exciting news. I have 2 questions here. Maybe to follow up on the partnership question. As you think about the potential structure of what you might be looking for, we've seen other companies look at these as either sort of single-asset partnerships or more platform partnerships focused on like solid tumors or hematological malignancies. I'm just wondering, how do you think about what a structure would look like? And then my second question, CD19, BCMA. When you think about the existing competitive landscape for these targets, are there ways that you're thinking about potentially pursuing something like a dual-targeted CAR-T or a dual CAR-T TCR? I know you mentioned that you have right to TCRs as well.

Great. Thank you. Great questions. Thanks, Jennifer. So in regards to the partnership, you're absolutely correct. All of those possibilities are there. There is now the -- obviously, with having this especially two proven targets under our belt, the whole platform possibility is out there. At the same token, as you mentioned, it can be indications, a specific one or a certain number of targets. One other aspect of this, as I mentioned, it's a different directional partnerships in autoimmunity as well as cancer. And then finally, the discussions around the, for instance, U.S. rights versus the rest. And these are what is at the center when we are discussing with the partners that are coming in. And I think with -- we will obviously decide in the future in the best path forward for us and in a non-dilutive manner for our investors that can allow the expansion of our portfolio, both for the patient and for the organization, with absolutely maximizing the value of the programs. But it's one of those situations that we are -- we have been discussing actually different kind of strategies. In regard to CD19 and BCMA and the field, as I mentioned, we believe that actually with the platform that we have and moving this -- currently, there are a number of companies that are still working in a classical fashion on a CD19 and BCMA, even the off-the-shelf or the regular classical CAR-T TCRs. With the promise that, okay, if they see a little bit better safety or similar efficacy, where I think we are distinguishing ourselves and have done so is we clearly have the manufacturing that no one else has. And we clearly have the ability to gain market share rapidly because of the benefits that our platform provides, not only for the patient as far as the access is concerned, but also from pricing as well as from redosing. And we believe that we can carve out the best in a class with the promise of the platform that we have. But at the same token, to what you mentioned in regard to the dual CAR-Ts or TCRs. Definitely, our platform of a nonviral unlike what originally was with others that has allowed us to obviously put number of genes in, and we can do that, and this is part of, obviously, expansion of that portfolio. In regard to the TCRs, we have that capability. And our platforms are much more advanced, both from perspective of addressing the viabilities but number of TCRs that can be incorporated. And we have the rights which belongs to us for membrane-bound IL-15. And this is something that we are exploring with others in regard to the partnership.

Okay. Super helpful. If I could squeeze one more in. On the IL-12, the [real] switch, gene switch, I just want to see, are there other pipeline products that currently utilize that switch?

There is -- right now, we do not have that. But definitely for IL-12, one of the benefits has been for the -- because IL-12, the major issue that originally had, I don't know how many people remember the original science issue that came, this was a molecule of the year. And the problem with it was that if you could not control the amount, the toxicity and the real switch now in a number of the clinical trials have shown that it can control the release of IL-12 very well. And therefore, we have shown the great -- very comprehensive safety profile of IL-12 in various indications besides just glioblastoma, by the way. In number of solid tumors, this has been shown. And this would actually -- puts us very advanced, because this data already exist and we don't have to go to preclinical or even clinical Phase I or Phase II. We have the data, and we can combine it. One other important part of this basically corporate development was, for us, the regain back the rights total to IL-12, not only to the original AdenoVerse platform that was given, but also the gorilla AdenoVerse platform IL-12 that we had licensed out. And we regained that back. That's very important for us, that platform, to be under completely our control and have the full management of that, which then obviously can be combined with our own as well as the other companies that they are interested in this IL-12.

Our next question will come from Swayampakula Ramakanth with H.C. Wainright.

This is Swayampakula with H.C. Wainright. Congratulations. I know this is a very important piece of work that's important for you in terms of your conversations with partners and potential partners. As you're looking into that, I know your portfolio is pretty deep. But is there any possibility for your team to initiate a program such that you can get it to a place where you can get better economics? Or do you think this is more a play for partnerships period?

Definitely, I would say, a possibility for both. We truly believe that our platform allows for a rapid movement in this field. If any CAR-T can move fast and into the clinic, and especially in the Phase I, we have shown our platform to be that. And definitely, we are going to move this very rapidly. From a partnership, there's no doubt that it will -- enhances our ability for our continued discussions that we have, because now this has been one of the missing parts that a lot of companies are extremely interested, including some of the companies that they have their own approved drugs. And -- however, they are facing their manufacturing issues and the costs. And they have been trying to move towards fast [cars] as they call them, and unfortunately, have not been successful for the sake of the patients here. But definitely, this position us as a frontrunner there as well. And we will be really entertaining both. And that's why in May we will discuss further the strategies that we have for advancement of this program, but also from possibilities in a nondilutive cash manner to our investors that we can move this forward.

Our next question will come from Ben Burnett with Stifel.

Congrats on this update. I guess I wanted to ask just maybe for a little bit more color on sort of what motivated the updated agreement between you and Alaunos? So I guess was there a particular catalyst, or is this more sort of the result of kind of an ongoing dialogue?

Well, I think it has been important for our company to focus. We believe we have strong platforms to address the CAR-T targets, and especially also the AdenoVerse in combination with what we have accomplished and have shown as far as the promise of the AdenoVerse platform is. And it has become, I think, evident over the period of time that Precigen has the ability and proven platform that can move these targets rapidly. And clearly, we are interested to have this for patients. It's extremely important when you have a technology that can address the unmet needs of the patients and will be moving forward. So those have been basically why we have moved in regard to regaining this and why it has been important for Precigen. I will definitely will not be speaking on behalf of Alaunos and what they feel as far as what has been their reasons. And I will give -- basically give that to their management of the discussions for the reason. Of course, with any companies, we wish all of the companies the best, because at the end of the day, it's the patient population that we need to be concerned about. And we all should do our best to come up with the treatment that can address the patients. And that's what I can say about it.

Okay. I appreciate that. And I wanted just to clarify, did Alaunos or Ziopharm before that ever construct or test CD19 or BCMA UltraCAR-T in the clinic? Or have they always been focused on TCRs? Like I guess what is the history of these targets under their roof?

Yes. So Alaunos or Ziopharm, as you might know, in 2018, when Precigen separated and we licensed out these assets to them, including the IL-12, they did took the platform at that time that Ziopharm has through MD Anderson. And if you recall, they had -- they used -- they have the rights for CD19 to use that platform. And if I recall correctly, over the years, unfortunately, it was not -- they were not able to advance the platform or the target further than the original phases. And then eventually, if I am correct, and I would again ask Alaunos to clarify their own position, but it was stopped. From, I think, what is different here, and I just want to make sure everybody understand what Alaunos have used, this is not what Precigen has. Precigen, as I mentioned, in the past 3 years, we have advanced our UltraCAR-T platform and our UltraPorator that is specific to us. We took a platform, and we have -- for us, was important to make it scalable and commercially viable. And that's exactly what we have done. And we have shown in the clinic now that not only we can manufacture overnight, but also we can expand these cells and this [ self-persist ] and lead to the efficacies that we have seen across the different indications. And we have -- we believe we have a proven platform that now can be combined with the targets. We did not -- obviously, we had to license out the right to CD19 and BCMA to Alaunos or Ziopharm. And now with regaining that back, we can apply it with our platform, which we believe is differentiated, proven and we can move very rapidly forward. So this is not going to be the molecule that, at some point, Ziopharm 40 years ago had put in the clinic. It's just basically our platform with the target that now we can advance very rapidly. Yes. So with that, I would like to thank you all for joining us this morning for our update call. And as you can see, this is a very important development for us at Precigen. We look forward to providing updates in the near future, and I wish everyone a terrific day. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.