Gamida Cell Ltd.
Q3 2019 Earnings Call Transcript

Published: 13 Nov 2019

[Operator:]

Ladies and gentlemen, thank you for standing by. And welcome to the Gamida Cell Third Quarter 2019 Financial Results Conference Call. My name is Sherin and I’ll be your operator for today’s call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that this call is being recorded at Gamida Cell’s request. Now I would like to introduce the host for today, Ms. Jaren Madden, Vice President of Investor Relations and Corporate Communications. Please go ahead.

[Jaren Madden:]

Thank you, Sherin and good afternoon everyone. Welcome to today’s call, during which we will provide an update on the company and review our financial results for the third quarter of 2019. Here today, we have Julian Adams, Chief Executive Officer, Ronit Simantov, Chief Medical Officer, Tracey Lodie, Chief Scientific Officer and Shai Lankry, Chief Financial Officer. Following our remarks, we will open up the call for Q&A.We also issued a press release this afternoon summarizing our financial results and progress across the company, which is available on our website 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 Form 20-F filed with the SEC on February 25, 2019 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 and we caution you that we may not update them in the future, whether as a result of new information, future events, or otherwise. And now I'd like to turn the call over to Julian.

[Julian Adams:]

Thank you, Jaren and thanks to everyone for taking the time to join us this afternoon. At Gamida Cell, we’re committed to finding cures for patients with blood cancers and rare serious hematologic diseases through the development of next generation cell therapies. Our most advanced product candidate omidubicel is in Phase 3 development and could offer a life saving treatment option for patients in need of a bone marrow transplant. Behind omidubicel is GDA-201, our expanded natural killer or NK cell development candidate and immunotherapy with the potential in both hematologic malignancies and solid tumors. We’ve continued to make important progress across both programs.Turning first to omidubicel. This is the first bone marrow transplant product to receive breakthrough therapy designation from the FDA and has also received orphan drug designation in the U.S. and in Europe. Despite the curative potential of the 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 infections, 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 patients who do not have a match related donor.Our international multicenter randomized omidubicel is designed to evaluate the safety and efficacy of omidubicel compared to standard umbilical cord blood in patients with high risk hematologic malignancies. We expect to complete enrollment by the end of this year, enabling a top line data read-out in the first half of 2020.Upon positive data, we anticipate submitting the BLA for omidubicel in the U.S. in the second half of 2020 with potential FDA approval and launch in 2021. We will use a common technical document for our regulatory filing, which enables us to streamline the work required to file a marketing authorization application or MAA for omidubicel in the EU.We’re also advancing key activities required to bring omidubicel for patients following potential FDA approval. Work is ongoing to build the manufacturing infrastructure both at Lonza and our own facility, to help ensure that we will have sufficient and reliable commercial supply.We’re also working to develop comprehensive hospital services and patient assistance programs designed to bring omidubicel to patients. Additionally, we are evaluating omidubicel in an investigator sponsored Phase 1/2 study in patients with severe Aplastic Anemia, a rare and life threatening blood disorder. Earlier this year, we reported initial data from the first cohort of three patients at the Transplantation and Cellular Therapy meeting or the TCT meeting.The data showed that all three patients successfully underwent a bone marrow transplant, consisting of omidubicel plus haploidentical stem cell graft. Patients are now being enrolled into the second cohort, which is designed to evaluate omidubicel as a standalone graft.Turning to GDA-201, we're encouraged by the early data generated in our Phase 1 investigator sponsored study in patients with non-Hodgkins lymphoma, and multiple myeloma. Emboldened by the multiple complete responses reported earlier this year, we’re developing a cryopreserved formulation to enable a multicentered multi-dose Phase 1/2 clinical study in patients with non-Hodgkins lymphoma next year.Both omidubicel and GDA-201 were created using our proprietary NAM technology platform, which is designed to enhance the number and functionality of Allogeneic donor cells. This represents an important advance because preserving therapeutic functionality has been a key limitation to prior approaches. Next month, we will present data on GDA-201 and on our NAM platform at the Annual Meeting of the American Society for Hematology or ASH. Dr. Veronika Bachanova, who provides updated results from GDA-201 study during an oral session on Monday, December 9.That same day, we will also report new preclinical data that reinforce our understanding of the mechanism of action underlying our NAM technology platform. Last summer, we appointed Tracey Lodie as 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 and completed a postdoctoral fellowship at the Beth Israel Deaconess Medical Center in the Department of Hematology Oncology. Her experience in transplant biology and immuno-oncology research further enhances the team and she's already making an important impact on our research strategy.I'll now turn over the call to Ronit Simantov, our Chief Medical Officer and Tracey to review our ASH abstracts in more detail. Ronit?

[Ronit Simantov:]

Thank you, Julian and good afternoon to everyone joining the call today. I'm pleased to summarize the abstracts for GDA-201 and provide an update on what you can expect to see at the ASH meeting next month. First, taking a step back, natural killer or NK cells have potent anti-tumor properties, and are increasingly being recognized as a potentially transformative approach to immunotherapy.The tumor killing activity of NK cells is greatly enhanced by antibodies that recognize tumor cells, which trigger antibody dependent cellular cytotoxicity or ADCC. The binding of an antibody to a cell market for destruction by activated NK cells, however a key limitation to the therapeutic utility of NK cells in the past has been the ability -- inability to generate sufficient numbers of highly functional cells in contract. We are using our NAM technology to potentially overcome this limitation. This first in-human study is designed to assess the safety of three increasing doses of GDA-201 in patients with non-Hodgkins lymphoma and multiple myeloma, as well as to determine the recommended Phase 2 dose. The study is being conducted by Dr. Veronika Bachanova at the University of Minnesota.The abstract submitted to ASH which was accepted for all presentation includes data from 20 patients, seven patients with non-Hodgkins lymphoma and 13 patients with multiple myeloma. First, it's important to note that the GDA-201 was generally well tolerated with no dose limiting toxicities observed. We were also pleased to observe clinical activity at all doses evaluated, which was particularly encouraging to see in a population of heavily pretreated patients with advanced disease.Among seven patients with non-Hodgkins lymphoma, there were three complete responses and two partial responses. The median duration of response was 12 months for the complete responders and five months for patients with a partial response. One of the patients with a history of CLL and Richter's transformation showed continued tumor shrinkage post therapy. This was clinically very interesting because it suggests that GDA-201 illicit an adaptive immune response.Among the 13 patients with multiple myeloma, one patient had a complete response and four had stable disease.Next month in the oral presentation, we expect to include longer-term follow-up for the patients already reported, as well as data from additional patients who are enrolled and evaluable since the time of abstract submission.As Julian mentioned, these data compel us to move forward with our clinical development plan and activities are underway to enable an IND submissions for our next study in non-Hodgkins lymphoma. I'll now turn the call over to Tracey to review our preclinical abstract.

[Tracey Lodie:]

Thank you, Ronit and good afternoon, everyone. During a poster session at ASH, we will report new preclinical data that reinforce our understanding of the mechanism of action underlying our NAM technology platform. Our research included transcriptome transcription factor and pathway analysis by next generation sequencing to elucidate the pathways leading to the preservation of engraftment after ex-vivo expansion of omidubicel compared to CD34 cells grown in the absence of NAM. Broadly, we found that NAM down regulates gene expression pathways involved in the proliferation and differentiation of stem cells and up regulates gene expression pathways that preserve them. I want to highlight three key findings.First, we saw reduced expression of genes involved in the production of reactive oxygen and nitrogen species which we feel that NAM minimizes cell stress during expansion to suppress differentiation. Second, NAM cause a decrease in the expression of genes responsible for Matrix metalloproteinase secretion. We feel this stimulates the micro environment of the bone marrow. Third, we observed increase expression of Telomerase, enabling cells to remain in a more quiet and semi-state. Taken together, we believe that the presence of NAM mimics the hypoxic environment of the bone marrow to preserve the function and long-term engraftment ability of stem cells.These data provide scientific rationale for the favorable engraftment and patient outcomes observed in a previously reported Phase 1/2 clinical study of omidubicel. We are really pleased to building our scientific understanding of our technology platform, which we believe could be used to spend any focus. We are continuing to enhance mechanism of action for omidubicel to characterize and produce during the expansion process and we are beginning to conduct similar mechanism of action studies with GDA-201. With that, I'll turn the call over to Shai to reveal our financial results.

[Shai Lankry:]

Thanks Tracey and good afternoon everyone. We are pleased with the advancements we have made so far this year, we set a foundation for multiple key milestones in 2020. This afternoon, I will review our financial results for the third quarter of 2019. You can find our nine months results in our SEC filing. As of September 30, 2019, we had total cash, cash equivalents and available for sale assets of $68.1 million compared to $60.7 million as of December 31, 2018.As a reminder, we completed the following offering earlier this year which aggregates gross proceeds of $40.3 million.Research and development expenses for the third quarter of 2019 was $7.4 million, compared to $5.1 million for the same period in 2018. This increase reflects the advancements of omidubicel and GDA-201 programs.General and administrative expenses were $4.6 million for the third quarter of 2019, compared to $2.4 million for the same period in 2018. The increase was mainly due to a $1.2 million increase in activities related to commercial readiness as well as $1 million increase in professional services, and other expenses, including the increase in expenses associated with being a publicly traded company.Finance income net was $1.7 million for the third quarter of 2019 compared to finance expenses net of $2.2 million for the same period in 2018. The net increase was primarily due to non-cash income resulting from the revaluation of Florence offset by non-cash expenses from the revaluation of the Israel Innovation Authority royalty-bearing grant liability. Net loss for the third quarter of 2019 was $10.1 million, compared to a net loss of $9.8 million for the same period in 2018. We continue to expect cash used for ongoing operating activities in 2019 to range from $35 million to $40 million, reflecting anticipated expenditure to advance the company's clinical programs. With less than one quarter to go in the year, we can tell you that we expect to be in the upper end of this range.We anticipated 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 plan 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 has been an important executional year for Gamida Cell. With omidubicel, we have the opportunity to bring the first FDA approved for cell therapy for bone marrow transplantation to patients. We’re completing patient enrollment in our Phase 3 study working on the BLA filing and advancing key launch readiness activities required to reliably bring omidubicel to patients. With GDA-201, we’re at the forefront of advancing NK cells as the next generation immunotherapy. We’re working on several activities to enable a multicentered study of GDA-201 in non-Hodgkins lymphoma next year.We have a strong team in place committed to progressing these programs and look forward to providing updates on our progress over the coming months. Now we will open the call for questions, operator?

[Operator:]

[Operator Instructions] Your first question comes from Jason Butler from JMP Securities. Your line is open.

[Jason Butler:]

Hi, thanks for taking the questions. First just a couple of GDA-201. In the ASH presentation, should we expect to see additional lymphoma patients versus what you saw in the abstract and then just wondering if you could elaborate a little on your comments that GDA-201 may trigger an adaptive immune response. Do you have any preclinical data that speaks that question or any ongoing preclinical studies? Thanks.

[Ronit Simantov:]

I'll take the clinical piece. This is Ronit. So in the presentation at ASH, we expect to see a couple more patients worth of data as well as a longer duration of data and that's on the lymphoma patients for both of those. And as you know the ASH abstracts were submitted in July. So additional patient information incrementally between July and approximately now for patients who are valuable will be available at the presentation. In terms of the reason for saying that we think that there might be an adaptive response, this one patient was quite interesting to us because the patient initially had a modest response that a month after receiving their NK cells, and their GDA-201 and that that response continued to deepen over the time period that the patient was followed and reported in the abstract.So that told us that there's probably a continued response from mediated no longer by GDA-201 but triggered by GDA-201 and now mediated by adaptive T-cell response. Julian?

[Julian Adams:]

And the reason for that belief is that the NK cells only persist for about a week. So to see continued shrinkage of the tumor must mean that some adaptive immunity has occurred. This continues to be a hypothesis and we have lot of samples from this patient and we're looking to demonstrate that with scientific rigor.

[Jason Butler:]

Great. And then just one quick follow-up on omidubicel manufacturing. Can you just give us an update as to where you are with your Israel facility? And do you expect this facility to be online at launch as well as the Lonza supply? Thanks.

[Julian Adams:]

So the facility is currently under construction. Lonza has a pre-existing facility in the Netherlands. And we believe that our launch site will be Lonza, followed shortly thereafter by the facility in Israel, which will come online later in 2021.

[Jason Butler:]

Great, thanks for taking the questions.

[Operator:]

Your next question comes from Gregory Renza from RBC Capital Markets. Your line is open.

[Gregory Renza:]

Hey, Julian and team, congratulations on the progress and thanks for taking my question.

[Julian Adams:]

Thank you.

[Gregory Renza:]

Julian, just wanted to start with omidubicel and the progress you're making there. With respect to enrollment, potentially wrapping by year-end, I’m just wondering if you could perhaps put a finer point on the data or the release that we could expect in the first half or within that timeframe keeping in mind, certainly the considerations for venue, as well as just understanding the context around the two day endpoints and how that sort of fits to the expectations that we can develop. Thank you.

[Julian Adams:]

Since that's a very clear clinical question, I'll turn it over to Ronit.

[Ronit Simantov:]

Thanks Julian and thanks Greg. So we are on track to complete that enrollment, quite confident that we will complete enrollment by the end of the year and hope to think more about that, when that happens. In terms of venue and exact timing for the primary endpoint, I don't have that information for you today, I think we will be able to put a finer point on it once enrollment is complete, and we will certainly keep you posted.

[Julian Adams:]

Please appreciate that abstracts do at certain times and to be eligible presented certain meetings, we have to be certain that we have clean and reportable data in time to submit with an abstract.

[Gregory Renza:]

Absolutely understood, thank you. And then just maybe moving towards the more commercial side that Julian and team but perhaps you could just provide that your latest color on the pricing framework for omidubicel, how you think about either baseline payments or subsequent payments, versus outcomes and your latest thinking there will be great? Thank you.

[Julian Adams:]

Of course, I can't comment on pricing. We had a lot of work to do to arrive at market price. But what I can say is that we believe talking to payers that we will be reimbursed to a carve-out mechanism from the case rate that is offered to transplant centers.

[Gregory Renza:]

All right, thank you very much, guys. Appreciate it.

[Julian Adams:]

Thank you.

[Operator:]

Your next question comes from Matthew Luchini from BMO. Your line is open.

[Unidentified Analyst:]

Hi this is Nasha on for Matthew. So quick one from me. I think the preclinical data illustrating the mechanism of action for omidubicel is very interesting, what can this information help you in terms of strategically thinking about where to apply it next. How does it, how does it inform you?

[Julian Adams:]

Tracey, I will let you answer that question.

[Tracey Lodie:]

Sure, sure. Thank you for that question. This is Tracey. We're really excited about the data because this is really the first data that comes from the Israeli RD Group elucidating and adding on to our current understanding of what nicotinamide does to cells.So I think where it helps us really is two-fold. We now are able to distinguish our NAM platform and really understand how NAM is mimicking the bone marrow environment, really to preserve the stemness of the CD34 cells and we believe that is directly related to the improved engraftment improved clinical outcome that we saw in the Phase 1 and Phase 2 study.So in addition, we’re now working with academic investigators to look at metabolomic profiling of this work that hopefully is an extension of the gene expression profiling. So it will help us in terms of understanding for manufacturing and expansion process improvements for omidubicel for sure, in addition, we're expanding this work as I said to GDA-201 and currently are analyzing data sets of NK cells expanded with NAM compared to those expanded without NAM. And we think in addition that this will preserve the natural phenotype of the NK cells, which will distinguish our NK cells from other expansion technologies out there and other NK cells out there, which we think we can also apply to the platform broadly.So that we can improve the days and culture and improve the process and improve the manufacturing expansion of the protocol while maintaining the activity of the NK cells, which is key. So I think just leading to an overall understanding of what NAM is doing and what pathways is hitting we will improve the existing products and help us understand where we can go in the future as well.

[Unidentified Analyst:]

Okay, very thankful. Thank you.

[Julian Adams:]

Thank you.

[Operator:]

Your next question comes from Mark Breidenbach from Oppenheimer. Your line is open.

[Unidentified Analyst:]

Hey, guys, this is Matt on for Mark. Thanks for taking our questions. I also had a couple on the NK program. So first, Julian, I mean could you guys anticipate making any other tweaks to 201, it's obviously a cryopreserved product but any other tweaks in the plan multicenter trial or will the product and the treatment protocol otherwise resemble that, that that's being tested at the University of Minnesota. That's my first question and the second one is as you start to think about next generation approaches, I mean I know you have a collaboration ongoing with Editas, you mentioned in path possibly exploring engineered variance for enhanced cell persistence and potency. Can you give us an idea of what types of modifications you guys are kind of thinking of? Thanks.

[Julian Adams:]

Yes, so first to your first question. We are continuing to optimize the GMP process for yield and consistency. Again, there are donors. And so we are examining the patient to patient variability, so that we can set the specifications for our NK product. And then cryopreservation is necessary, so we can initiate a multicenter and possibly multi-dose study next year.In terms of the next generation activities for NK, there are certain genetic modifications that we're contemplating. We haven't announced publicly what those are. But we'll do so when we have data and present data at a scientific venue.

[Unidentified Analyst:]

And then maybe one follow-up to my first question. From the healthy donors, are you going to require any degree of matching like I've seen some NK adoptive NK approaches require like four out of six matching of HLAs? Will you also be doing that?

[Julian Adams:]

Currently, we do not believe there's any requirement for matching. The trial in Minnesota is using haploidentical donors. So they're half matched, but we don't believe based on the primitive nature of the NK cells that there's any matching requirement. And we haven't observed any GvHD in the Phase 1 setting. So, we think that any healthy adult allo donor is a legitimate donor.

[Unidentified Analyst:]

Great, congrats on the progress.

[Julian Adams:]

Thank you.

[Operator:]

[Operator Instructions] Your next question comes from Ted Tenthoff from Piper Jaffray. Your line is open.

[Ted Tenthoff:]

Great, thank you very much. A great call, lots of good questions. I was thinking a little bit more you have mentionedbased on positive data next year from Phase 3 study, the potential to file not just in the U.S. but also Europe and I wanted to get a sense from you about the commercial scale or the commercial feasibility manufacturing products yourselves, is Europe territory that you think could tackle yourselves? Thank you very much.

[Julian Adams:]

Ted it’s a great question. We are definitely exploring. We have European sites, and European investigators very interested in omidubicel and we feel it's our obligation to try to bring omidubicel to as many patients as possible globally. So whether we end up doing it ourselves or through some strategic partnering for ex-U.S. an open question at this point. But we will do all the necessary filings and enablement for either our launch in Europe or potential partner.

[Ted Tenthoff:]

Great, excellent. Well, I'm really looking forward to the data hematology and then pivotal study next year. Thanks so much.

[Julian Adams:]

Thanks, Ted.

[Operator:]

Your next question comes from Chad Messer from Needham & Co. Your line is open.

[Chad Messer:]

Great, thanks. Good evening and thanks for taking my questions. In the ASH abstract, you had 12 months of durability at least in the CR patients. As we look to get an update with more durability obviously an important question here. What do you think, what amount of durability do you think is interesting is significant for patients with this technology?

[Ronit Simantov:]

Thanks, Ted, this is Ronit. So these are all heavily pretreated, relapsed or refractory patients, none of the patients had great responses to their prior therapies. They all relapsed after prior therapy within a very short period of time. So the 12 months in and of itself is of CR which means no disease is I think quite impactful for patients. And you'll get, will get updates in the presentation at ASH but I certainly think what we've seen so far is enough for us to continue to want to ask this question and go forward with the next study in this indication.

[Julian Adams:]

Let me add to that, one benchmark that we monitor is the progression free survival rates for the PI3 kinases, idelalisib and duvelisib which is approximately 11 or 12 months. So we think a response of a year certainly significant. And the fact that it's a single administration treatment in this setting makes it and well tolerated, makes it potentially positioned ahead of the PI3 kinase treatments.

[Chad Messer:]

Okay, great. Thanks that makes sense and I look forward to the updated action.

[Operator:]

There's no further question at this time. I would now like to turn the call over back to Julian.

[Julian Adams:]

Thank you, everyone for joining us on the call today. We hope to see many of you at ASH next month. We look forward to providing a further update on GDA-201 and our NAM technology at that time. Operator?

[Operator:]

That concludes today’s call. You may now disconnect.