Gamida Cell Ltd.
Q2 2019 Earnings Call Transcript

Published: 11 Aug 2019

[Operator:]

Welcome to today's call during which we will provide an update on the company and review our financial results for the Second Quarter of 2019. With me here today are Julian Adams, Chief Executive Officer, Ronit Simantov, Chief Medical Officer, Shai Lankry, Chief Financial Officer and Tom Klima, Chief Commercial Officer and Tracey Lodie, Chief Scientific Officer. Following our remarks we will open the call for Q&A.We also issued a press release this morning summarizing our financial results and progress across the company, which is available on our website at www.gamida-cell.com. During this call, we may make forward looking statements about our future expectations and plans, including clinical development objectives, the therapeutic potential of our product candidates, our operational plans and strategies and projected operating expenses and cash runway. Our actual results may differ materially from what we project today due to a number of important factors, including the considerations described in the risk factors section of our registration statements on an annual report Form 20F filed with the SEC on February 25, and other filings that Gamida will submit with the SEC from time to time.These forward looking statements represent our views only as of today, we caution you that we may not update them in the future, whether as a result of new information, future events, or otherwise.Now I'd like to turn the call over to Julian Adams.

[Julian Adams:]

Thank you, Jaron. Thanks to everyone for taking the time to join us this morning. At Gamida Cell we are focused on transforming the treatment landscape for patients with blood cancers and rare serious hematologic diseases to development of next generation cell therapies. Our most advanced product candidate omidubicel is in Phase 3 development and could offer a universal bone marrow transplant solution for patients with hematologic malignancies. Behind omidubicel is GDA-201 our expanded natural killer, or NK cell development candidate. An immunotherapy was potential in both hematologic malignancies, and solid tumors. Both omidubicel and GDA-201 are based on our proprietary nicotinamide or NAM expansion technology. Our NAM technology platform is designed to preserve the therapeutic functionality of cells that are being expanded in culture with growth factors.This represents an important advance because preserving therapeutic functionality has been a key limitation of prior approaches. Over the past few months, we have made important progress across every aspect of our company. Turning first omidubicel patient enrollment is progressing in our Phase 3 study. This is an international multicenter randomized trial designed to evaluate the safety and efficacy of omidubicel cell compared to standard umbilical cord blood transplant in patients with high risk hematologic malignancies. Completing enrollment in Phase 3 and Phase 3 randomized study will be a significant achievement and is expected to lead to top line data readout in the first half of 2020. Upon positive data, we anticipate submitting the biologics license application or BLA for omidubicel cell in the U.S. in the second half of 2020 with potential FDA approval and launch in 2021.We are also working on key activities required for a successful product launch. Most importantly, we recently signed a strategic agreement with Lonza for the future commercial manufacturing of omidubicel. This agreement provides us with access to a top tier manufacturing site for long term commercial supply. To help ensure that we will have sufficient and reliable commercial supply, we also signed an agreement with Biopharmax, biopharmaceutical design and construction firm to initiate construction of our own commercial manufacturing facility in Israel. Additionally, we are beginning to establish the infrastructure support services needed to bring omidubicel to patients. So overall, we're continuing to make important progress with omidubicel as we work to make bone marrow transplant safer and more accessible to patients with life threatening blood cancers.We are also at the forefront of revolutionizing the next generation of cancer immunotherapies. Our second developing candidate GDA-201 harnesses the innate immune system through NK cells. We are encouraged by the early days generated in our Phase 1 investigator sponsored study of GDA-201 emboldened by the multiple complete responses reported earlier this year. We are developing a cryopreserved formulation of GDA-201 to enable a multicentered, multidose Phase 1/2 clinical study in patients with non-Hodgkins lymphoma next year.As the company has advanced, we have further strengthened our team to ensure that we have the skills and leadership abilities required for future success. Last month, we appointed Tracey Lodie, as our Chief Scientific Officer. She has previously worked at BlueRock, Syros and Sanofi Genzyme and has been instrumental in advancing several development programs through regulatory approval in the area of transplant and autoimmunity. Tracey obtained a PhD in immunology and pathology at Boston University Medical School, and completed a postdoctoral fellowship at the Beth Israel Deaconess Medical Centre in the Department of Hematology, Oncology. For experience in transplant biology and Immuno-Oncology research further enhances the team and she's already making an impact on our research strategy.I'll now turn the call over to Ronit Simantov, our Chief Medical Officer to review our clinical programs in more detail.

[Ronit Simantov:]

Thanks, Julian. Good morning to everyone joining the call today. I'm pleased to share an update on both the omidubicel and the GDA-201 program. Omidubicel is the first bone marrow transplant product to receive breakthrough therapy designation from the U.S. Food and Drug Administration and has also received orphan drug designation in the U.S. and Europe. Despite the curative potential of a bone marrow transplant, it is estimated that more than 40% of eligible patients do not receive a transplant for a number of reasons, including the inability to find a match donor. Additionally, bone marrow transplant has risks including the risk of infection and other complications, such as graft versus host disease. We believe that omidubicel has the potential to address these limitations and to improve treatment outcomes for all patients who do not have a readily available matched donor. Our ongoing Phase 3 randomized study is evaluating safety and efficacy of omidubicel in approximately 120 patients with high risk hematologic malignancy. This study is now taking place at 45 centers around the world, including sites in the U.S., Europe and Asia.Enrolling randomized trials in bone marrow transplant is challenging. However, we are pleased with a high level of engagement and enthusiasm from the study sites. As we seek to complete this registration of study, we truly appreciate the participation and support we have received from patients and from investigators who believe this clinical trial is critical for moving the field forward. We expect to complete patient enrollment by the end of this year to enable top line data in the first half of 2020.We kept the enrollment criteria and endpoints of our Phase 3 study consistent with the Phase 1/2 trial and we believe -- we feel confident about the potential for Phase 3 success based on the Phase 1/2 data. These data which were published in the Journal of Clinical Oncology, demonstrated that patients transplanted with omidubicel have rapid and durable engraftment of neutrophils and platelets. The median time to neutrophils recovery was shortened by nearly 50% for patients who received omidubicel compared to a real world cohort patients who received standard umbilical cord blood. Additionally, patients transplanted with omidubicel that fewer days in the hospital compared to the comparative cohort. Omidubicel is also being evaluated in an investigation sponsored Phase 1/2 study in patients with severe Aplastic Anemia are rare and life threatening blood disorder.Earlier this year, we recorded an initial data from the first cohort of three [ph] patients at the transplantation and cellular therapy meeting or the PCT meeting. The data showed that all three patients successfully underwent a bone marrow transplant consisting of omidubicel plus half to identical stem cell graft. Notably in this study, patients received a reduced intensity conditioning regimen. In June, we initiated patient enrollment for Cohort 2, which is designed to evaluate omidubicel as a standalone graph. We are pleased with how this study is progressing and look forward to providing an update on Cohort 2 at a future medical meeting once we have accrued a sufficient number of patients.I will now turn to GDA-201, an investigational NK cell immunotherapy. At the PCT meeting, we reported encouraging initial data from the first 14 patients in our Phase 1 study of GDA-201 in combination with an antibody and relaxed refractory patients with non-Hodgkins lymphoma and multiple myeloma. The primary focus of the study was to evaluate the safety of GDA-201 in combination with rituximab in patients with non-Hodgkins lymphoma or in combination with elotuzumab in multiple myeloma.We were pleased to see that GDA-201 was generally well tolerated in these heavily pre-treated patients with advanced disease. Among the six patients with non-Hodgkins lymphoma, a valuable for activity, we were thrilled to see three complete responses and one partial response. Two of the patients who achieved a complete response subsequently received a bone marrow transplant with the intention of curing their disease. Another patient with aggressive lymphoma had a partial response at day 28 and continued to response further on and follow-up. This is clinically very interesting to us because it indicates that GDA-201 may be eliciting an adaptive immune response. We also reported a complete response in a patient with multiple myeloma. Patient enrollment in this study is ongoing at the University of Minnesota and we expect additional data to be presented in the second half of 2019.As Julian mentioned these data compel us to move forward with our clinical development plans and we anticipate initiating a multicenter multi-dose Phase 1/2 clinical study of GDA-201 in patients with non-Hodgkins lymphoma next year. To wrap up our clinical updates, we have made important advances with both omidubicel and GDA-201, two cell therapies with the potential to provide important treatment options to patients who are facing life threatening pregnancies. We have important milestones ahead and I look forward to keeping you updated on our clinical progress.With that, I will turn the call over to Shai to review our financial results.

[Shai Lankry:]

Thank you, Ronit. Good morning everyone. As you heard from Julian and Ronit we are pleased with the advancements we have made so far this year, and are continued to build on this progress over the course of the year. This morning, I will review our financial results for the second quarter of 2019. You can find our results for the first half of the year in the press release and in our SEC filings. As of June 30, 2019, we had total cash, cash equivalents and available for sale securities of $41.7 million, compared to $60.7 million as of December 31, 2018. The June 30th cash position excludes the aggregate gross proceeds from our recent public following offering which were $40.3 million.Research and Development expenses for both the second quarter of 2019 and the second quarter of 2018 were $7 million. R&D expenses were higher in the second quarter of this year compared to the same period last year due to the due to the advancement of omidubicel and GDA-201 but were offered by an increase in grants related to the Israel Innovation Authority.General and administrative expenses were a $3.8 million for the second quarter of 2019 compared to $2.9 million in the same period in 2018. The increase was mainly due to a $0.4 million increase in cash and non-cash expenses related to hiring and establishing the U.S. headquarters as well as a $0.5 million increase in professional services associated with being a publicly traded company. Finance income net was $16.8 million for the second quarter of 2019 compared to finance expenses net $3.2 million in the same period in 2018. The net increase was primarily due to non-cash income resulting from devaluation of [indiscernible] offset by non-cash expenses from devaluation of the Israel Innovation Authority were given grand liability. Net income for the second quarter of 2019 was $6 million, compared to a net loss of $13.1 million in the same period in 2018. We continue to expect cash use for ongoing operating activities in 2019 to range from $35 million to $40 million reflecting anticipated expenditures to advance the company's clinical programs. We are updating our cash runway guidance following the recent financing and now expected that our current total cash position will support our ongoing operating activities into the fourth quarter of 2020. This cash runway guidance is based on our current operational plans and excludes any additional funding or business development activities.With that I will turn the call back over to Julian.

[Julian Adams:]

Thanks, Shai. This is an important executional year for Gamida Cell. With omidubicel we have the opportunity to bring the first FDA approved cell therapy for bone marrow transplantation to patients. We are moving forward with key launch readiness activities while working hard to advance our Phase 3 study to enable a data read out. With GDA-201 we're at the forefront of advancing NK cells as a next generation immunotherapy. We're working on several activities to enable a multicenter study of GDA-201 in non-Hodgkins lymphoma next year. We have a strong team in place committed to advance in these programs and look forward to providing updates on our progress throughout the year.Now we will open the call for questions. Operator?

[Operator:]

[Operator Instructions]. Your first question comes from the line of Gregory Renza, RBC Capital Markets. Your line is open.

[Gregory Renza:]

Just wanted to just start with the omidubicel program, please and just touch on some of the activities around the clinical trial that you may have touched on in your prepared remarks. Just going a little deeper on number one, just the manufacturing of agreement with Lonza and just the expectations on the supply there to serve the specific regions seeing that you're certainly looking at the European facility, but then also your -- you mentioned of the Israeli could you touched a little bit about where you stand with U.S. and how you view those facilities serving the specific regions? Thanks.

[Julian Adams:]

We've had an ongoing and very fruitful relationship with Lonza for about 15 years, and we have had uninterrupted clinical supply for our trial and as we looked towards the potential launch, we needed a commercial facility. We looked throughout Lonza's various plants and there's a brand new plant now situated in the Netherlands and that suited us both in terms of supply needs, as well as a very modern and well-heeled site.We're not satisfied that we would have a single supplier. So we've agreed for an internally and with the board for business continuity and redundancy. We are building our own facility in Israel, where we will have better control and also have redundancy built into our supply chain to serve all patients.

[Gregory Renza:]

Great. And just a word if you could on just the concept of engaging the [indiscernible] of this plan and building the value proposition where you stand with that what types of information have you already provided to them with the planning, and how that process will play out as you proceed with the pivotal trial but then so beyond that, beyond the readout.

[Julian Adams:]

I will ask Tom, our Chief Commercial Officer to comment since he is spearheading this effort.

[Thomas Klima:]

We are right in the middle of the process of engaging with all the key payers in the United States. I think I've mentioned previously on previous calls that we expect the payer mix to be predominantly commercial for omidubicel given the study design and characteristics of the patients enrolled in this study. So we've been working closely to educate payers on what the Phase 3 data will look like or looks like. So Phase 1/2 data looks like what the Phase 3 study looks like and working with them to secure the best path for reimbursement. It's been pretty clear that the path for reimbursement is straightforward. It will require a partnership in education along the way, but we're getting very positive feedback around what they need to see and that we will ultimately have [indiscernible] omidubicel.

[Gregory Renza:]

And just one more question for me and I'll hop back in the queue. And that's just in regards to GDA-301 or 201 rather. Just curious where you stand with the effort for the cryo formulation and how you look at the cryopreservation, of course, as a gating factor for expanding with a larger trial next year. What steps are underway and need to be taken and what would the timeline look like? Thank you very much.

[Julian Adams:]

Yes, so let me comment on cryopreservation. It's necessary that to have a cryopreserved product that will be off the shelf, if we want to engage multi-centers. Our current GDA-201 is being manufactured as fresh cells in Minnesota and of course, that's fine for one center but we have ambition to do a multicentered study. So that's number one.I would say the progress is going very well in the lab, we have successfully learned how to cryopreserve, it's very artful as well as scientific. It is not easy to do this but we have years and years of experience in cryopreservation, based on our work with omidubicel. And what's really needed is to just lock down the final format and turn it into a GMP process, which we aim to do later this year. With that done, and eventually, all the pre-IND activities that we will need to do including toxicology, we expect to launch the trial sometime next year. I'll provide more color and the timing as the closer we get to filing the IND.

[Operator:]

Your next question comes from the line of Chad Messer of Needham & Company. Your line is open.

[Chad Messer:]

Just a little more on GDA-201, you're calling it a multi-dose trial. Was the ongoing trial is that only single dose and if you're going to multi-dose, what is dosing look like?

[Julian Adams:]

Yes that’s essentially correct. The current trial is a split infusion over a couple of days, but it is essentially giving it as a bonus dose. So what we have the ability to do with cryopreserve formulation is to do some dose-rangings some dose finding and schedule it is clear that based on the [indiscernible] depletion regimen used to condition these patients that we have about a couple of weeks, in which we could dose intensify and give up the three or four doses per patient. So that's something we're interested in exploring.

[Chad Messer:]

Great, and what are your long term plans to potentially go into solid tumors?

[Julian Adams:]

So we're serving that as we speak, we're doing it pretty quickly on cell lines, looking at the combination of various antibodies with GDA-201 and as we have data, we will make those data available at scientific meetings. We're very emboldened due to the high expression of CD-16 on our NK cells, that we have a very fit product in GDA-201.

[Chad Messer:]

Okay. Early days. Very exciting stuff, maybe just a real quick one on Aplastic Anemia, this 20 or so patient second phase of the trial is that potentially fileable? I mean, this is a very small indication and you would have all that safety data from the Phase 3, just wondering your thoughts on that.

[Ronit Simantov:]

You're right. Aplastic Anemia is a rare disease and this cohort is looking at patients being treated with single dose single unit omidubicel. As we mentioned, today, we've started to enroll that second cohort and our plan is once we do you know it's a single arm study, open label and once we do see results on a number of patients, our plan is to look at those results carefully and potentially discuss with the regulators to find a path forward that's the most efficient path to approval. And we certainly think that going forward with a pact for rare diseases is something that we would look towards.

[Operator:]

Your next question comes from the line of Mark Briedenbach of Oppenheimer. Your line is open.

[Unidentified Analyst:]

Thanks for taking our questions. This is Matt on for Mark. Julian, I know it's a bit premature but can you guide how you guys are thinking of packaging the omidubicel data in the first half of '20? Should we expect the data just to include top line engraftment or might and also include more extended follow up on treatment related mortality or other outcome?

[Julian Adams:]

I think the goal is to provide top line data as we said which is related to our primary endpoint.

[Unidentified Analyst:]

Okay, that's fair.

[Julian Adams:]

There is more extensive follow up required for these patients. So the final data and database lock will occur later in the year. As we are preparing the BLA as well.

[Unidentified Analyst:]

Okay, got it. Thanks for the clarity. And then we're also wondering if you could set expectations for the nature of the data, the update on GDA-201 later this year? I mean, should we really expect additional patients treated since TCT more follow up, etcetera? And can you also remind us if that trial protocol has been amended to restrict enrollment to non-Hodgkins lymphoma?

[Ronit Simantov:]

So this is a safety and dose finding study and we've already seen enough in this study to be confident about moving forward in non-Hodgkins lymphoma. But we do want to complete the study at the site of University Minnesota who is sponsoring the study at this point and they have accrued additional patients both with lymphoma and myeloma and we expect to provide some incremental additional patient data as well as longer follow up from the patients that were already presented at TCT. In addition, we will continue or we have continued to enroll the multiple myeloma cohort to complete the cohort as the study originally set out, but the data that we've seen so far really has us moving forward in the lymphoma cohort in terms of the next study.

[Operator:]

[Operator Instructions]. Your next question comes from the line of [indiscernible] of Needham & Company. Your line is open.

[Unidentified Analyst:]

Just one about GDA-201 considering this will be a frozen formulation for the next study. Will this from a single batch or will there'll be multiple batches for the study?

[Julian Adams:]

Currently it will be multiple batches, each patient will get GDA-201 derived from an [indiscernible] patient. a donor, sorry.

[Unidentified Analyst:]

All right. And just a bit of a question on your facilities in Israel. Are there any additional tax benefits for developing the facility in Israel?

[Julian Adams:]

We happen to be in a favorable tax zone in Israel and yes, that was one of the considerations.

[Operator:]

I'm showing no further questions at this time. I would now like to turn the conference back to Julian Adams.

[Julian Adams:]

Thank you, everyone for joining us on today's call. During the quarter we have worked very hard to advance our pipeline as we seek to bring advanced cell therapies to patients with limited treatment options. We look forward to providing additional updates throughout the year.