Celyad Oncology SA
Q4 2020 Earnings Call Transcript

Published: 26 Mar 2021

[Operator:]

Greetings and welcome to the Celyad Oncology Year End 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now turn the conference over to your host, Filippo Petti, Chief Executive Officer of Celyad Oncology. Thank you. You may begin.

[Filippo Petti:]

Thank you, operator, and thank you everyone for joining us today for our 2020 financial results call. Joining me from the management team is our Chief Scientific Officer, Dr. David Gilham; our Vice President of Global Clinical Development & Medical Affairs, Dr. Frederic Lehmann; and our Chief Business Officer, Dr. Stephen Rubino. We will start today’s call with an operational and clinical update followed by an overview of our financials and then we’ll then outline the expected key milestones for the company over the next several months. We will then open the line for your questions.

[David Gilham:]

Thank you, Filippo, and thank you everyone again for joining us today. As Filippo just discussed in 2020, we have thoroughly evaluated our portfolio and underlying technologies. Now back in 2017, we started working clinically with the NKG2D receptor as a novel CAR T cell therapy approach. Our clinical trial activity there’s definitively demonstrated the safety of this approach. We’ve promising evidence of clinical activity in both solid tumor indications and hematological malignancies.

[Frederic Lehmann:]

Thank you, David. It’s great to have this opportunity to speak with everyone today about the progress we’ve made in our pipeline over the past year. As David and Filippo have discussed, we are very excited by the date that we have generated and to potential from our ongoing studies, which support our decisions to focus our future energy programs through the prioritization of our allogenic onset. Let me start by providing you an update on our clinical activities with CYAD-211 as just mentioned by David, CYAD-211 is a first-in-class, allogeneic CAR T candidate engineered to co-express a BCMA-targeting CAR and a single shRNA, which interferes with the expression of the CD3 beta component of the TCR complex. In December last year, we announced the start of the IMMUNICY-1 trial, which is a first-in-human, open-label, dose-escalation study evaluating the safety and anti-tumor activity of a single infusion of CYAD-211 following cyclophosphamide and fludarabine preconditioning chemotherapy in patients with relapsed/refractory multiple myeloma. The trial seeks to determine the recommended dose of CYAD-211 for further development as well as to establish proof-of-concept that single shRNA-mediated knockdown can generate allogeneic CAR T cells in humans without inducing Graft-versus-Host Disease. To note by health authority request for the first-in-class allogenic CAR T candidate and we’ve seen here to other allogenic CAR T candidate in third stage development, The enrollment of each patient is staggered with a period of 28 days between patients. To date, FOLFIRI cell have been activated for the trial. Today, we are pleased to announce that no safety concerns, no evidence of graft-versus-host disease or immune effector cell have effected lower toxicity syndrome have been reported in the three first patients treated at the dose level 1 of CYAD-211 at 30 million cells per infusions. Accordingly, the enrollment for the dose level 2 of IMMUNICY-1 study is now underway, is evaluating CYAD-211 active dose of 100 million of cells per infusions. We continue to announce additional proof-of-concept data from each of those cohorts of the study by the end of the second quarter of 2021. Let me now turning to the CYAD-101 program. Again, it's mentioned by David, CYAD-101, Celyad Oncology’s first-in-class non-gene edited clinical candidate, which co-expresses the NKG2D receptor and the novel TCR inhibitory molecule of TIM, which compares to that matching CD3 data inducing the TME of the TCR complex protecting from graft-versus-host disease. Our current clinical program, which we refer to as the alloSHRINK Phase 1 study is focused on the treatment of advanced metastatic colorectal cancer, a difficult indication for immunotherapy.

[Filippo Petti:]

Thank you, Frederic. Turning to our financials, I'd just like to remind you all that our full financial details are available on the Celyad Oncology website in both French and English languages. For the full year 2020, our research and development expenses were €21.5 million compared to €25.2 million for the full year of 2019. The €3.7 million decrease was primarily driven by the decrease in preclinical activities, including process development, as well as clinical development of our autologous AML and MDS programs. In 2020, general and administration expenses were €9.3 million as compared to €9.1 million in 2019, an increase of €0.2 million. Our net other income for the full year 2020 is associated with other received – grants received from the Walloon Region mainly in the form of recoverable cash advances, the change in fair value of contingent liabilities in R&D tax credit income. Net loss for the year ended December 31, 2020 was €17.2 million or €1.23 per share compared to a net loss of €28.6 million or €2.29 per share for the same period in 2019. The decrease in net loss between periods was primarily due to the increased change in fair value of contingent considerations combined with the decrease on our R&D expenses. Net cash used in the operations for the year ended December 31, 2020, which excludes non-cash effects, amounted to €27.7 million as compared with €28.2 million for the year ended December 31, 2019. As of December 31, 2020, the Company had treasury position of approximately €17.2 million or $21.2 million. Subsequent to the end of the fiscal 2020, we entered into a committed equity purchase agreement for up to $40 million with Lincoln Park Capital. Over the 24 month term of the agreement, we will have the right to direct Lincoln Park to purchase up to an aggregate amount of $40 million American depository shares or ADSs, each of which represents one of our ordinary shares.

[Operator:]

Our first question comes from the line of Olga Smolentseva with Bryan, Garnier. Please proceed with your question.

[Olga Smolentseva:]

Good afternoon, guys, can you hear me well? Thank you. Good, thanks and congratulations on the ongoing progress and just a few questions on CYAD-101. Firstly, I'm sorry if I missed it, but I'm just curious about the timing of the CDC follow-up for the first three patients. And basically how long has it been since the infusion and maybe if we could get some flavor on CRS profile as well?

[Filippo Petti:]

So with regards to the 101 program and the alloSHRINK expansion cohort has, as you know, we announced that we had dosed the first patient in December of last year. What we can say today, I think is enrollment continues. As you may recall, we're looking to enroll somewhere between 12 and 15 patients within the cohort. We currently have multiple clinical trial sites that are up and running within Belgium. We also are moving diligently to open up a clinical site in the U.S. as well. And essentially, I think, it's – in general, enrollment I think has been good and healthy. And we're excited to see some of the initial data towards the end of the first half year for us to get a better sense of how the program continues to develop and a big part of that is also how we will feed into the KEYNOTE-B79 study and being able to initiate that with our partners at Merck.

[Olga Smolentseva:]

And basically 211 as well, I'm just curious if you get any flavor on the initial safety on those cases.

[Filippo Petti:]

Yeah. Maybe I'll turn it over to Frederic to provide some additional thoughts. But what we've seen so far in the first dose level is, as Frederic highlighted, no graft-versus-host disease. I think we're very happy. This is a first in-human study where we're using the shRNA technology to really drive an allogeneic CAR T. So I think we're encouraged. It is still early days here. So as we dose escalate up into the program in IMMUNICY-1 trial we’ll learn more. But we can say as, I think we're comforted in the first initial readouts on safety and we'll look for the program to progress. And then I turn it to over to Dave – to Frederic for some additional thoughts there.

[Frederic Lehmann:]

Yes. Thanks, Filippo. I have really nothing to add on that point of view in the dose level 1, which I remember, 30 million per infusions to strictly no type of toxicity vise CSO per add and other graft versus host disease. Three patients that we have end dosing with toxicity in that reason why we directly enter to the dose level 2, which is now at 100 million of cells. Nothing relate to other…

[Olga Smolentseva:]

And maybe just the last question, if I may. Could we maybe expect any updates in terms of self-expansion and persistence in the near term as well?

[Filippo Petti:]

Yes. I think those are certainly things that we're keeping an eye on. We'd like to provide as you know, some additional data here as we continue to move through the program. I think today's update for us is certainly encouraging, right? It helps us what we were trying to establish in terms of proof-of-concept. And that'll come from multiple things, right. If there an initial kind of clinical safety readout and right now, I think we're very encouraged with the lack of graft versus host disease and that we've seen so far, as we continue to progress, I think we're really focused on the ability to continue enrollment the other parts of proof-of-concept for us. As it could obviously be – can we begin to see some hints of clinical activity within the program and then how does that match up to sell kinetics, is certainly a question we're looking to answer here in the upcoming months.

[Olga Smolentseva:]

Clear. Thanks a lot.

[Filippo Petti:]

Thank you for your questions.

[Operator:]

Thank you. Our next question comes from the line of Raju Prasad with William Blair. Please proceed with your question.

[Raju Prasad:]

Hey, thanks for taking the question and congrats on the progress. Can you discuss a little bit your dosing strategy for 211? Given what we know about kind of the dose response with BCMA and CAR T, are you thinking about, doing the kind of necessary safety hurdles in 100 and kind of dose escalating to 300? Or will you be guided by potential efficacy there? Maybe just a little insight there would be great.

[Filippo Petti:]

Yes. Thanks for the question, Raju. So we will be evaluating dose levels currently within the 211 program. As we've reported today, the first three patients in the 30 million dose level 1 are now moving into the 100 million dose level. We'll look to then go to a 300 million dose level. So it's a three plus three design. We're currently, I think what's important here is also, we're infusing the cells by cyclophosphamide and fludarabine, and really 300 mgs per meter squared and 30 mgs per meter squared, respectively. I think one thing that we have at the top – top of mind for us is to get through these next couple of cohorts then do we think about perhaps maybe altering the preconditioning. But I think what's – I think key for us is to get to those higher dose levels. I think what we've seen from the BCMA landscape is kind of a dose escalation. There seems to be improvement in the responses. And I think overall, we anticipate that we'll begin to maybe see some initial clinical activity at the middle dose. And as we begin to dose escalate up at that higher 300 million dose level that we really will provide the greatest insight into how the program could potentially move forward. And from that perspective, we may think about perhaps altering the preconditioning if necessary.

[Raju Prasad:]

Great. And maybe just a question on the shRNA platform, clearly, the first proof-of-concept is favorable on GvHD. But maybe some discussion on the modularity of the platform, obviously there's discussion how much B2M should be knocked out, obviously, it’s been in track I think obviously, something that you learned knockout completely of the T cell receptor. But maybe a little bit of discussion on the difficulty of kind of giving modular response and the manufacturing associated with that, I'm curious to hear your thoughts, maybe David, on variability of cell products when you're looking for 70% knockdown versus a complete knockout. Thanks.

[Filippo Petti:]

Yes. Thanks for the question. David, I think it might be a great question for you to answer that.

[David Gilham:]

Yes, sure. Hello, Raj and hi, everyone else as well. Yes. So good question. One of the key advantages that the shRNA approach gives us is that we can actually look to target at a specific level, which is one of the advantages we highlight. This is in an all or nothing. And exactly what the level of expression is HLA or B2M knocked down. It's still something up for debate. And so we're looking to try and understand this in our preclinical models to determine, is there a sweet spot that we can identify protection against both natural killer cell and B cell mediated rejection. That's very much on the activity. But I will highlight that we've really behind the scenes been working ever more on the platform, really with a view of having a multi-sector platform that allows us to express the shRNA with even more control in our first-generation option has allowed us. So that's how we develop. We can talk a little bit more about this later in the year about those, what I can say is that, the next generation multiplex approach we're using does give us a high degree of control in terms of the level of expression of the shRNA and actually the specific shRNA that's chosen does tend to show consistency in terms of the knockdown. So really the choice of the shRNA and we really determined the level of knocked down that can be achieved. And so we're using that within the basis of new and improving framework regions. So altogether, it's work in progress, in terms of understanding whether a near complete knockdown is required or a flavor or reduced level of knockdown, Raj, we want to really have some very vast clinical – preclinical assays that can answer that question. But the technology we're using at the moment, I think is gives us confidence that we can achieve whichever level of knockdown we're really aiming to want to achieve for those products.

[Raju Prasad:]

Great. Thanks for the questions.

[Operator:]

Thank you. Our next question comes from the line of Nick Abbott with Wells Fargo. Please proceed your question.

[Nick Abbott:]

Good morning, everyone. And thanks for taking questions. I think this one is for you. Obviously, it's very intriguing knockdown, TCR seems to improve persistence versus knockout. How do you think about the bar in order to declare that you can demonstrate increased persistence in the clinic?

[David Gilham:]

Yes. Hi, Nick. Good morning to you. That's a really good question. And so far as the fact that engraftment in the patients will be determined by the level of preconditioning chemotherapy. So, we’re using, I mean, if there is a standard level of chemotherapy 30 and 300 is probably slightly compared to the autologous situation will of course been we're looking to see what our peers and colleagues in the space are achieving with gene editing approaches in terms of looking at the expansion of persistence there. The question really will be that we need to be able to compare apples against apples and understand what the impact of preconditioning chemotherapy understand the engraftment and then the persistence of those cells over time, because clearly the persistence of those cells will be determined by the returning patient's immune response. So all of that says, it's not going to be so easy and straightforward to understand in the patients, Nick, but we're certainly, of course, we'll be looking at the absolute levels of those cells and how they persist certainly after a short term engraftment and then a persistence after that. But we will have to remind and try to understand how the different preconditioning regiments that are currently being used, how those impact on the different cellular therapies. That's not a great different spot, but we really have to ensure that we compare

[Nick Abbott:]

And do you think that the shRNA platform can be used to help defend against this recovering boost immune response? I guess there's probably not too much, you can do it for the blast they call themselves, but if there are atopic pathways or something, is that something you think is within the remit of the RNA platform?

[David Gilham:]

Absolutely. I mean, so one of the reasons why we were discussing that as looking up to controlling an expression of up to six different hairpins is the fact that we want that modularity in that function. So not only can we use this to generate the platform, which for instance, would be a TCR knockdown. Can we look to, as Raj was just mentioning, can we impact on the HLA, which allows us to try and defend against NK17 cell mediated rejection of another product. But then impacting on apoptosis on interest study the signaling pathways, which really is, I think the big advantage to the shRNA approach that we – because we're using a single vector, we can submit those cells easily and because we can also tighter down the level of expression of some of those key proteins and enzymes and kinase targets. Yes, we certainly can and we’re certainly looking at how we can impact on the survival of those cells as well, where they go into particularly harsh conditions. So that, that really is one of the biggest advantage of the shRNA approach certainly Nick. And understanding the contribution of each of those hairpin just going to be very key for us in terms of thinking about what the final products would look like.

[Nick Abbott:]

But thanks, and then last one for me. We noticed that with the recent cancer immunology immunotherapy publication, suggesting that type of thing of NKG2D ligands in myeloma stem cells could be an attractive option. So David, have you made a deal NKG2D BCMA CAR yet?

[David Gilham:]

So certainly top of mind Nick, in terms of using NKG2D because we certainly think the NKG2D not only as a frontline single chimeric antigen receptor approach gives us certainly benefits, but combining with other targets as well, where we could imagine that that not only potentially dealing with, say, for example, as you say ligands expressed on myeloma stem cells, but also more broadly than that using the stress ligands are very expressed across a wide range of tumors, whether we can combine our NKG2D CAR with other 1,000 approaches try and help elimination reduce escape is clearly top of mind at the moment. It’s something that we are working on in the background.

[Nick Abbott:]

Great. Thank you very much.

[Filippo Petti:]

Great. Thank you, Nick.

[Operator:]

Thank you. Our next question comes from line of Soumit Roy with Jones Trading. Please proceed with your question.

[Soumit Roy:]

Hi, good morning, everyone, and congratulations on all the progress. A question on the probably another way of asking the prior question the – are you measuring the CAR T expansion, at least in the first dose of CYAD-211 and what could be a trigger to change the preconditioning regimen prior to completion of all the bullets cohort up to 300 million like second dose cohort, if you see the CAR Ts are not extending, would that push you to change the preconditioning ahead of schedule. Just trying to get your thoughts this year?

[Filippo Petti:]

Yes. Soumit, thanks for the question. That’s a good one. Look, we are certainly going to be looking at the data here and processing that still in going through analysis on the kinetics we only plan to have an update and really having us to try to triangulate as to what’s going on. I think a couple of things here for us as we think about the manufacturing, perhaps look if we take a step back because have it all in one vector process, because we do a single transduction table because we are using an enrichment process with allogeneic cells. We have a more of an autologous like manufacturing process for us. So now we’re currently evaluating this, but as a first in human study as David pointed out, we’re looking at more of a standard preconditioning in the context of B cell malignancies and hematological malignancies let’s say of 330 for cyclophosphamide and fludarabine for a few days. For us, I think because we have picked up this hint that there may be a better persistence there, we want to see, I guess, how that all ends up with kind of a standard preconditioning approach because we are I think it’s a more – from our perspective, more robust manufacturing process. Does that translate using a standard approach in a standard chemotherapy that similar to the – I think some of the great data we’ve seen around BCMA and the autologous side of CAR T does that translate. And then I think we want to get through the three plus three design and get through the first 9 to 12 patients would say, and then really kind of have a sense of how we would think about maybe altering the preconditioning. So I think it’s premature right now. I think that it’s something we recognize that the landscape within the context of allogenic CAR T some of our peers are using preconditioning doses that are certainly higher and maybe longer in duration as compare to what we’re starting off with. But I think one of the things we’re trying to test out is capture kind of lightning in a bottle here and having an allogenic CAR T but because it’s more autologous like we get more autologous like data. So that’s the premise that’s what the hypothesis we’ll run the study, collect our facts and then see how we would need to pivot from there. And David, if you’d like to add something there as well, yes.

[David Gilham:]

Yes. I appreciate it. Thank you, Filippo. And Soumit, hi, nice to speak to you. I actually passed that practice relates to some of the other questions that Raju and Nick asked and Olga asked in particular. And so the reason why Filippo says about an autologous like process. This is really around the duration of time in culture because we’re not carrying out multiple edits and then having to really extensively select the cells and then – and look to really expand into a very high level. We culture ourselves for around about 12 days and so pretty similar to many autologous approaches. So the reason why we feel, but we’ve reached this – what happens when we infusing cells into the patients is cells that, that shorter-term of culture, that culture type that’s very similar to an autologous product does that correlate with the levels of engraftment that we can see with the autologous BCMA product in particular, again, using the same precondition chemotherapy of 30 and 300. So that’s really the underpinnings of the process. What we’ve tried not to grow the cells for an extended period of time, I’m sure you’re aware there’s a lot of knowledge out there, but the shorter, the culture period that January the better in vivo effect. And so we’ve looked at a compromise there around 12 days to really ask the question of whether that shorter culture as well, which shRNA approach gives us and the single vector approach whether those factors combined to join the process. We can see in half the engraftment as those cells are they following the pause by standard PCR based technologies to understand the relative engraftment of those cells. So that’s really just to capture fleet those comment there around the autologous like this really based on the duration of culture that we maintain ourselves for before they’re banked.

[Soumit Roy:]

Got it. That was really helpful. The second question is the access of the despite there are several allogenic is coming up, it’s still the big – after 2D technology is a big draw here. And are you thinking of any way to monetize and capitalizing on your technology? It looks like it’s heading in the right direction and where you can actually claim in the next six months that you are there and this is a valid allogenic approach.

[Filippo Petti:]

I think that’s a great question. So maybe I’ll turn it to Stephen to let him answer as well. But I think for us, I think it’s key that this data set that we’ll be generating for CYAD-211, I think is going to be crucial for us to really put up a flag in the ground around the capabilities, the flexibility around shRNA, and thinking about this is a very novel approach to allogeneic CAR T. Let me hand it over to Stephen as well, to have him provide some thoughts.

[Stephen Rubino:]

Yes. And let me build on what Filippo offered as well as what David mentioned and highlighted in some of his answers as well around the shRNA platform. We clearly believe that we’ve got our proprietary products and secondarily what we have with the shRNA platform, the power, the flexibility to really be able to build enhanced CAR T cell that’s foundational to us. And we are looking to build on that through a pipeline expansion as well in terms of opportunities of building allogeneic CAR T cells on this first generation that you’ve seen with CYAD-211, but also the second generation that David talked about in terms of increased flexibility and power there. And we’re looking to see how we can create value for our own pipeline and for others in terms of collaboration, partnerships, co-development, opportunities down the road with this platform, because we do think it really is best in class. We think it’s a much better platform than the gene editing platforms simply because, we’re not changing the underlying genome, but more importantly, we have the ability to titer things up and down as opposed to an on-off that you get with gene editing. So all of those things are really front center when we think about how we’re building pipeline for ourselves and looking for partnering opportunities with other players who have a similar interest in building next generation CAR T therapy.

[Soumit Roy:]

Thank you so much and congrats on the progress.

[Filippo Petti:]

Yes. Thank you for the questions, Soumit.

[Operator:]

Thank you. Our next question comes from the line of Ed White with H.C. Wainwright. Please proceed with your questions.

[Ed White:]

Thanks. Just two quick questions for me. First on the CYAD-211, from what I could surmise from what you said before, investors should not be expecting clinical efficacy at the first dose level, is that correct? And then we’ll look more to the second dose level.

[Filippo Petti:]

Yes, look I think we chose – the doses we’ve put in place here. It’s the first in human study. I think we wanted to make sure we looked at doses that we could scale up to and I’ve been speaking with the health authorities and then also looking across and from similar programs in BCMA both autologous and allogeneic, I think those were really the guide in presence and some of the data we had in house that we wanted to kind of sort of the lower dose and get our arms around what the safety profile may look like, and really specifically around the shRNA and Graft-versus-Host Disease, et cetera. So I think kind of a lower dose level and having us about scaling up and I think is what we’ve seen if you look at the BCMA landscape as you scale up and dose typically you’ve seen improvement in response rates when you’ve seen improvement within the context of duration of response. So overall, our belief is that we’ll need to get to that middle dose level before we begin to see some initial activity. But we may be happy to see something in an earlier at the first cohort, but at this point, I think we’re looking into the higher dose levels, but let’s see where the cards will.

[Ed White:]

Great. Thanks, Filippo. And then the second question, when talking about the future allogeneic candidates with the shRNA, will you be looking at solid tumors as well?

[Filippo Petti:]

Yes, that’s certainly it’s a great question. And it’s a key focus for us. I mean we’re looking to really establish the proof of concept with CYAD-211 in the context of shRNA and with a well understood target and well understood indication. But I think one of our key focuses is obviously the CYAD-101 program in the context of solid tumors, you believe there’s a tremendous potential for NKG2D in particular around solid tumors, because of not only the ability of the receptor to target stressful again on the tumors themselves, but also within the tumor microenvironment. I think we talked a little bit about this last year at our R&D Day. The ability of the NKG2D receptor to target myeloid-derived suppressor cells, Tregs cells that are going – undergoing neovascularization, and so really a holistic approach to solid tumors. Now I think one of the key at least from my perspective, one of the key aspects of the CAR T landscape, because I think folks are looking for solutions for solid tumors with this modality. And we are obviously looking at potential other targets that could maybe compliment where we have with NKG2D as well. So overall, I think it is a certainly a clear focus of the organization, but I think we’ll be balanced in terms of thinking about not only solid tumors, but hematological malignancies that we could target and indications that would be applicable there.

[Ed White:]

Great. Thanks for taking my questions.

[Filippo Petti:]

Great. Thank you, Ed.

[Operator:]

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I’ll turn the floor back to Mr. Petti for any final comments.

[Filippo Petti:]

Great. Thank you, operator. Well, with that we’ll bring the call to a close. I’d like to thank everyone for joining us today and your continued interest in Celyad Oncology. And we look forward to speaking with everyone soon and to a very catalyst rich 2021 for us. Thank you.

[Operator:]

Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.