Genocea Biosciences, Inc.
Q4 2018 Earnings Call Transcript

Published: 28 Feb 2019

[Operator:]

Good Ladies and gentlemen and welcome to the Genocea Biosciences Fourth Quarter 2018 Financial Results Conference Call. [Operator Instructions] As a reminder today's conference may be recorded. I would now like to turn the call over to Paul Arndt, Managing Director at LifeSci Advisors. Sir, please begin.

[Paul Arndt:]

Thank you, Mark, and good morning, everyone. This morning we issued a press release that outlines the topics we plan to discuss today. This release is available at genocea.com under the Investor Relations tab. During the call today, Chip Clark, President and Chief Executive Officer, will provide a corporate update and review the financial results. After his prepared remarks, we will open up the call to Q&A and Chip; Jessica Flechtner, Genocea's Chief Scientific Officer; and Tom Davis, Genocea's Chief Medical Officer will then be available to answer your questions. Before we begin, I would like to remind everyone that statements made during this conference call relating to Genocea's expected future performance, future business prospects or future events or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the Safe Harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from those forecast due to the impact of many factors beyond the control of Genocea. Genocea expressly disclaims any duty to provide updates to its forward-looking statements whether as a result of new information, future events or otherwise. Participants are directed to the risk factors set forth in Genocea's 2018 Annual Report on Form 10-K and other periodic reports thereafter filed with the Securities and Exchange Commission. It is now my pleasure to pass the call over to Chip.

[Chip Clark:]

Thanks, Paul and good morning, everyone. Thanks for joining us on today’s call as we review a few recent aannouncements along with our fourth quarter highlights. Let me start off by expressing my pride in and gratitude to the Genocea team for the agility and tenacity they have demonstrated in affecting our strategic pivot to cancer and in getting GEN-009 our lead neoantigen vaccine into the clinics and patients. That momentum has continued into this year. As I hope you saw earlier this morning, we announced that Diantha Duvall is joining us as our new CFO. She joins Tom Davis, our Chief Medical; Derek Meisner, our General Counsel; and Girish Aakalu our Chief Business Officer as recent leadership team additions. And I have to say I couldn’t be happier with our leadership team and indeed the entire team we're assembling here. Now let's turn our attention to our recent efforts. In early January, Genocea reached an important milestone dosing the first patients and completing enrollment in Part A of our GEN-009 Phase 1/2a clinical trial. And given that we had relaunched Genocea as an immuno-oncology company just 15 months earlier, we're very pleased with this pace of progress and look forward to seeing the first immunogenicity data from this study in mid-2019. We also presented compelling Atlas data at the SITC meeting last November. For those of you who may be new to our story Atlas is our proprietary antigen identification platform that we believe enables us to know rather than predict the right neoantigens for each patient. Unlike machine based systems which make educated guesses about antigen selection, and I should note based on available evidence of [purity guess] incorrectly. Atlas enables us to perform not just a personalized tumor profile, but also a personalized profile of the CDA and CD4 T cell responses that each patient makes to every single tumor mutation. Using that information we identify both the neoantigens against which we want to amplify and concentrate immune responses, as well as what we call inhibitory neoantigens that appear to suppress immune responses broadly and therefore we wish to direct the immune system away from them. At SITC, we presented new data in a mouse melanoma model providing evidence that these neoantigen specific inhibitory responses could be tumor promoting. We injected mice with Atlas identified inhibitory neoantigens and this caused tumor growth. This contrasts with those we injected with only neoantigens of pre-existing antitumor responses as we're doing in our GEN-009 clinical trial where the opposite occurred both a positive immune response and antitumor efficacy. We also presented new data indicating the relative frequency of inhibitory neoantigens may help predict the patient's response to checkpoint inhibitor therapy regardless of their tumor mutational burden. Atlas's robust biological readouts in other words may insure better use of checkpoint inhibitors, as well as enable better vaccines and cell therapies. We continue research in both of these exciting areas and look forward to additional presentations at upcoming scientific and medical meetings. Last quarter, we also ramped up investment in GEN-011 our neoantigen adoptive cell therapy or ACT program which we would like to provide a little more detail on now. In our GEN-011 program, as in our GEN-009 program we are using Atlas to identify patient specific neoantigens of potent antitumor CD8, CD4 T cell responses. Rather than making a vaccine with such neoantigens we instead expand that patient's own T cells to those neoantigens which we isolate from PBMCs to therapeutic levels for introduction back to the patient as a treatment. We believe GEN-011 will provide several advantages over exploratory ACT approaches such as TIL therapy or TCR therapy including greater potential immunogenicity and efficacy through the inclusion of both CD8 killer T cells and CD4 helpers identified through Atlas. The exclusion of T cells responding to inhibitory neoantigens and the inclusion of multiple perhaps dozens of antigen specific T cell types to broaden the antitumor effect and mitigate risk of tumor escape. Using a patient's own nonengineered T cells could improve on the safety and speed and cost of manufacturing. And lastly the approach could provide efficacy against a greater variety of tumor types in current methodologies. We are currently conducting preclinical efforts of GEN011 and aim to file an IND in the first half of 2020. Now let's turn briefly to our financial results before opening the call up to questions. As detailed in today's press release, we ended the fourth quarter with cash and cash equivalents of $26.4 million. In addition, it should be noted that we raised $15 million in gross proceeds a couple weeks ago. This enabled us both to extend our cash runway guidance and to invest diligently both in GEN011 and in prudent GEN009 clinical trial scale up. For the fourth quarter 2018, R&D expenses were $6.3 million compared to $7.9 million for the same period in 2017. G&A expenses were $2.6 million compared to $2.5 million for the same period and net income was $0.4 million compared to a net loss of $1.7 million for the quarter ended December 31, 2017. For full-year 2018 R&D expenses were $25.2 million for the year compared to $39.2 for the year ended December 31, 2017. G&A expenses were $14.3 million compared to $13.4 million for the same period and net loss was $27.8 million rather forgive me compared to a net loss of $56.7 million for the prior year. Lastly we’d like to mention that the Genocea Board of Directors has adopted a resolution approving and recommending that stockholders support a proposal in the company's upcoming preliminary proxy statement which we intend to file shortly to effect a reverse stock split of the company's issued and outstanding common stock if necessary to maintain a NASDAQ Capital Market listing. Let's now open up the call for questions. Operator?

[Operator:]

[Operator Instructions] Our first question comes from the line of Chad Messer of Needham and Company. Your line is now open.

[Gil Blum:]

This is Gil in for Chad. Just a couple of questions, first about GEN009 could you discuss a little bit what details we should be expecting from the topline readout things like T cells [where are] the CD4, CD8 ratios?

[Chip Clark:]

Yes, and do you want to give me the other question before we try to answer both.

[Gil Blum:]

Yes, sure. We’re also wondering when and where should we expect GEN009 data to be presented and I’d to follow on with a bit of a modeling question.

[Chip Clark:]

So I’ll saw ask Jess to speak to the GEN009 immunogenicity topline readouts to where we’re planning to present or may present I guess.

[Jessica Flechtner:]

For the immunogenicity readouts from this clinical trial we will likely - we are running ex-vivo, spot vivo, FluoroSpot assay which will measure Interferon Gamma and Granzyme B secreting T cells in response to each individual antigen of the vaccine and the pools. We will also be running cultured ELISpot to amplify the T cells responses that maybe present in the blood. Those are the topline data that will be available. We will also look for Epitope spread by repeating the Atlas assay to see if we have additional antigens that emerge. However in Part A of this study it may not be likely since the patients do not have tumors.

[Tom Davis:]

Of course our primary goal in releasing the data is to able to directly compare our immunogenicity results with those of competitors in order to show that Atlas is really allowing to select the key targets in the setting. You asked about what meetings, of course we can’t specifically predict where we will have the ability to present but I can point to a meeting that occurs in June that would be quite attractive for us and we have submitted an abstract there. It will be also the preliminary data so we will see what the reviewers consider but we certainly would expect to have complete data as we previously predicted in the third quarter of this year and perhaps a meeting in Europe in September would be appropriate.

[Chip Clark:]

So Gil hopefully that answered your questions with respect to GEN009 but I guess you had a follow up.

[Gil Blum:]

Yes, that was very detailed, thank you very much. Just a general modeling question I have seen that your G&A spend seems to be going down should we look for flat expenses throughout 2019 or could you give us any detail on that.

[Chip Clark:]

Yes, I mean I think we're trying to operate Gil as leanly as possible and there may be some slight wobble over time but I think you should expect it to be broadly flat.

[Gil Blum:]

Excellent, thank you very much and good luck with the GEN009 we are excited about the data.

[Operator:]

[Operator Instructions] Our next question comes from the line of Joe Pantginis of H.C. Wainwright. Your line is now open.

[Joe Pantginis:]

Thanks for taking the question. Three questions if you don't mind first actually Chip wanted to go to a comment you made in your prepared script with regard to using your financial resources and your comment was prudent 009 scale up. I was just curious what you meant by that with regard to just maybe selecting tumor types assuming the immunogenicity data are positive and how you look to expand the program.

[Chip Clark:]

Yes Joe, thanks for the question. When we think about the prudent scale up we’re principally talking about preparation for Part B and C which will be the combination with checkpoint inhibitor or in inhibitor refractory patients. They’re probably three principal activities underway, the first is maybe closest to what you suggested. We’re sort of making sure that we keep step with sort of advances in sort of standard of care and as appropriate slightly modifying our protocol. So that we can on entry into Parts B and C best sort of reflect the state of treatment today. The more I would say resource consuming at least financial resource consuming elements of scale up are two things. Probably the biggest is expansion of our capacity in our supply chain to be able to accommodate not the sort of the handful of patients that are in Part A but a larger component - larger cohort of patients for Parts B and C. We’re also investing in preparation for that sort of scale up effort through site identification and site activation and patient recruitment related activities. So but I think the key word here is prudent, we’re not sort of going all out there. We’re trying to make sure we are ready to appropriately respond to success.

[Joe Pantginis:]

No, that's great clarification, thanks for that thanks for that. And then my last question is since programs are expanding and your pipeline is expanding as well with 011 so thanks for the additional details today as well. So you’re bringing in additional autologous therapy and I wanted to focus on and this is obviously very forward-looking based on the early-stage nature. But with regard to manufacturing maybe you could sort of describe where you are now from a capacity standpoint to hit your 009 studies needs, and where you need to be with regard to bringing say 011 into the mix for manufacturing is this something you would look to do in-house in the future or look out licensed to a company like Lonza or [Roche] or something along those lines.

[Chip Clark:]

Since as you said looking very far into the future potentially of course eventually one could anticipate that we would bring this in-house. I think for the short-term GEN011 is much like GEN009 something that we would look to manage centrally, but outsource through sort of skilled experienced contracts manufacturers and you threw out a couple of names and you can imagine that we’ve gone through an exhaustive RFP process to identify a partner as yet not disclosed of course with whom we are conducting sort of the typical process development work right now.

[Operator:]

And I am not showing any further questions at this time. I would now like to turn the call back to Chip Clark for closing remarks.

[Chip Clark:]

Thank you. So with a great team in place, significant progress in our cancer immunotherapy programs and our recently completed financing, we believe we are well-positioned to continue to pursue our mission to help cure cancer. We look forward to reporting our progress throughout the year. And with that I thank you again for joining us today.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a wonderful day.