Selecta Biosciences, Inc.
Q4 2020 Earnings Call Transcript

Published: 11 Mar 2021

[Operator:]

Good morning, and welcome to the Selecta Biosciences Fourth Quarter and Full-Year 2020 Financial Results and Corporate Update Conference Call. Currently, all participants are in a listen-only mode. This call is being webcast live on the Investors & Media section of Selecta's website at www.selectabio.com and it is being recorded. For opening remarks, I would like to introduce, Brad Dahms, Chief Financial Officer of Selecta. Please go ahead.

[Brad Dahms:]

Thank you, and good morning. Welcome to our fourth quarter and full-year 2020 financial results and corporate update conference call. The press release reporting our financial results is available in the Investors & Media section of our website www.selectabio.com. And our annual report on Form 10-K for the year ended December 31, 2020 will be filed with the SEC.

[Carsten Brunn:]

Thank you, Brad. Good morning. I appreciate you joining us today. Over the past year, we've made several advancements for our ImmTOR platform to develop tolerogenic therapies designed to selectively mitigate unwanted immune responses and have achieved several key clinical, strategic and financial milestones that advanced our pipeline and set the table for an exciting year ahead. We believe our clinical and preclinical candidates have the potential to amplify the efficacy of biologic therapies, including re-dosing of lifesaving gene therapies, as well as restore the body's natural self-tolerance in autoimmune diseases. We will continue to advance our pipeline and build momentum in 2021. I'll start with our enzymes therapies programs. In 2020, we significantly de-risked the company through a strategic partnership with Sobi for SEL-212 and we've continued to make progress in getting to SEL-212 approved to treat patients with chronic refractory gout. SEL-212 is comprised of inter co-administered with our proprietary year case pegadricase. That remains a significant unmet medical needs in chronic refractory gout with only a fraction of the estimated 160,000 patients in the U.S. receiving treatment with the currently approved pegadricase. It is often a good program kicked off in the fourth quarter of 2020 and consist of two double-blinded placebo-controlled trials of SEL-212. In December, the first patient DISSOLVE I was dosed. DISSOLVE II was initiated in December 2020.

[Brad Dahms:]

Thanks, Carsten. We had $140.1 million in cash, cash equivalents and restricted cash as of December 31, 2020, which compares to $147.6 million as of September 30, 2020. We believe our current liquidity position will be sufficient to meet our operating requirements into the second quarter of 2023. Revenue recognition for the fourth quarter and fiscal year 2020 was $12 million and $16.6 million respectively, which compares with $6.7 million and $6.7 million for the same periods in 2019. The increase in revenue was primarily driven by the license agreement with Sobi resulting from the shipment of the clinical supply, as well as the reimbursement of cost incurred for the Phase 3 DISSOLVE clinical program. R&D expenses for the fourth quarter and fiscal year 2020 was $15.1 million and $54.5 million respectively, which compares with $15.2 million and $42.7 million respectively for the same period in 2019. During the quarter ended December 31, 2020, there was a reduction in expenses for the SEL-212 clinical programs due to the timing of the initiation of the Phase 3 DISSOLVE program compared to the Phase 2 COMPARE program in the prior period. This reduction was offset by increases in expenses incurred under the AskBio Collaboration combined with internal research and development to support our clinical programs.

[Carsten Brunn:]

Thank you, Brad. As mentioned earlier, 2020 was a transformational year for Selecta. And we're extremely excited about the continued growth of our company and confidence in our platform. I'd like to conclude by reiterating our gratitude to the many people, who have been supportive along the way, including our patients and their families, our investigators and our great team at Selecta. With that, we're happy to take questions.

[Operator:]

The first question comes from Kristen Kluska with Cantor Fitzgerald. Please go ahead.

[Kristen Kluska:]

Hi, good morning, everybody and thanks for taking my questions. So the first question is, how might the initial trials, you're conducting this year for gene therapy help you determine when might be the most appropriate time to potentially re-dose if successful? Do you think this is going to be viewed more of an indication by indication basis or more of a patient-by-patient basis? Especially if patients are dosed at different ages, considering the benefits we've seen across the field when treated earlier?

[Carsten Brunn:]

Thanks, Kristen, that's an excellent question. So I think what we're trying to address initially, is really the ability to re-dose. And that's defined as, are we able to prevent the formation of neutralizing antibodies and obviously that various very much by indication, but also patient-to-patient. If you look at specifically, could you have an indication, we believe there is a significant need there, especially in liver based applications. We know that the liver gout grows up to 40-fold actually from birth to adulthood. There is a, obviously high likelihood that you have to re-dose. In other indications, it might be a couple of years before re-dosing and we always reference that chem A data that is out there and what we saw after three years to four years, a decline of transgene expression. So it really varies by indication, age of the patients and individual patients.

[Kristen Kluska:]

Thank you. And then in your recent science advances publication, you highlighted that even a twofold decrease in vector dose could have a meaningful impact both to safety and cost. But I wanted to ask how you and your partners are thinking about these potential advantages from a manufacturing standpoint?

[Carsten Brunn:]

Yes. So obviously, we're excited about our publication science advances and indeed we believe if this translate into humans would be a benefit on various fronts, a lower dose obviously brings lower safety concerns, which I think is a key driver in gene therapy, but also a potential lower dose as well. And gene therapy manufacturing is a bottleneck and a key cost driver and associated lower cost of goods will be quite meaningful. But obviously we would have to see whether it translates from the non-human primate into humans, but we're definitely encouraged by the beta we have seen in non-human primates. Obviously, the increase in transgene expression is very relevant.

[Kristen Kluska:]

Great, thanks. And then a question for Brad, could you remind us whether your cash guidance if that's factoring in any potential milestone payments across your collaborations?

[Brad Dahms:]

Yes. So it does not include any potential milestone payments which would serve to extend our - sort of extend our own win in a non-dilutive basis.

[Operator:]

The next question comes from Raju Prasad with William Blair. Please go ahead.

[Raju Prasad:]

Thanks for taking the question and congrats on the progress on the pipeline. Just wanted to see if you could provide a little more color on the dosing regimen for the ImmTOR and gene therapy? Can you talk a little bit about the need to dose ImmTOR at the first dose of AAV8? And I think there is some discussion in some of the papers on the potential to increase Transduction on the initial dosage? And then maybe, Carsten, if you could also comment on the potential to dose - re-dose patients that have already received a gene therapy in another clinical trial because they are down the line. Thanks.

[Carsten Brunn:]

Yes, maybe I'll take the last question, it's - that's a quick one. So if we have been previously exposed to an AAV gene therapy and you have not been dosed of ImmTOR, we don't address this patient population. So you have to give ImmTOR with the initial dose. In terms of some color on the dosing, you're right, we saw a strong first dose benefits. So ImmTOR always have to be given with the first dose of AAV and we're obviously looking now with the anti capsid study to do a dose escalation or a testing as you know, Raju, three doses of ImmTOR. We're starting with 0.15, 0.3 and 0.5 to see what the appropriate dose is. And obviously, we feel very confident with these doses since we have almost dosed 300 and - almost 300 patients with ImmTOR in our gout program. We've also seen in the non-human primate study that monthly - three monthly doses are value as well and obviously we take all this into consideration for the first human approach with MMA.

[Raju Prasad:]

And a quick follow-up on the MMA program, have you disclosed ImmTOR dose that you'll be taking forward in that clinical trial?

[Carsten Brunn:]

Yes, we haven't filed the IND, so we don't want to give guidance before the IND has been accepted. So we'll have to hold off on that. But it's in the dose range we have previously discussed, I think I can say as much.

[Raju Prasad:]

And it will be - the dose selection was independent - is independent of the Phase 1 study results I assume or will you be able to look at that?

[Carsten Brunn:]

Yes, that's correct. Yes, we - they are not necessarily sequenced. So we plan to run this on parallel to independent of that. Yes, I mean, we have some learnings in some other way like corporate them, but right now they run in parallel basically or planned in parallel.

[Operator:]

The next question comes from John Newman with Canaccord. Please go ahead.

[John Newman:]

Thank you for taking my question. I just had a question on the - the work that you're doing in MMA, with MMA-101. So I'm just curious, what you would be looking to potentially present in terms of preliminary data? Would you focus on hopefully the lack of formation of neutralizing antibodies, which you - since you look to talk a little bit about, I don't know if you could get initial efficacy read that quickly, but just curious as to what types of things you might be thinking about for the preliminary data for that program?

[Carsten Brunn:]

Yes, that's a good question, John. Obviously, I mean, we're always trying to address the underlying disease with gene therapy. So we're looking at - at least in the initial biomarkers of off the disease such as MMA levels. But as a platform company, of course, we are extremely interested in the neutralizing antibodies because we think that's an indicator for the ability to be able to re-dose.

[John Newman:]

And with the MMA-101 program, would you potentially look to explore re-dosing with this program initially or would that be something that perhaps you would look at in a subsequent trial?

[Carsten Brunn:]

Yes, that's a good question as well, we get a lot as well. I mean, I think we would initially look at the first the efficacy of the gene therapy. Obviously, that's a key driver trying to treat those kids. And then we would see if we're able to prevent the formation of those antibodies as a good indication that we are able to re-dose, but it wouldn't be necessarily part of the first approach off the trial because it varies between kids when you have to re-dose, that will be a fairly lengthy trial.

[John Newman:]

Okay. Just one additional question, which is a broader question and that is, just wondering if you could talk about the existing partnership with AskBio whether that would preclude you from, if you choose to excuse me - to enter into additional partnerships. Obviously you have the partnership with Sarepta which is very interesting, but just curious if there's anything with the AskBio partnership that would perhaps maybe to a small extent limit other partnerships that you could enter into?

[Carsten Brunn:]

Yes, that's good question as well. Obviously, as you know it's - we can very selective in our partnerships and we are - we don't see any limitations having additional partnerships. And just to kind of remind everyone we have two partnerships with AskBio. We have a true strategic 50/50 collaboration where we plan to co-develop and co-commercialize gene therapies. The first indication is MMA. We've also licensed ImmTOR to AskBio for lead indication in Pompe disease. And then we have a research partnership with Sarepta, which is really focused on neuromuscular disorders. All the work we have done John is in liver based diseases. But yes, I mean there - I don't show as like 3, 400 different gene therapy monogenic diseases that can be addressed. So there's plenty of room for both inbound, as well as outbound partnerships as well.

[Operator:]

The next question comes from Difei Yang with Mizuho Securities. Please go ahead.

[Difei Yang:]

Hi, good morning and thanks for taking my question and congrats on all the progress on gene therapy side. So just a couple quick ones for the pediatric and adolescent gene therapies for MMA. Do you have a general sense throughout the patient's life, how many times you might need to or the patient might need to get re-treatment?

[Carsten Brunn:]

Yes, I'll hand this question to our CMO, Peter.

[Peter Traber:]

Thank you, Carsten. That's a very astute question, because the need for re-dosing really is quite going to be quite variable depending as you say on the age of the subjects, patients, as well as the disease indication. And I think one needs to look at different indications as to what re-dosing might be required. So for instance in neuromuscular disease say like Muscular Dystrophy, where you're going to be treating young boys, whose muscles will continue to develop. And you presumably will have to re-dose at a certain interval which remains to be determined. Also getting high levels of expression in say muscles might require a couple initial doses, which could be considered if we were able to re-dose using ImmTOR. In other disorders like metabolic disorders like MMA or OTC deficiency, it's really going to depend on how the liver grows and what the continued expression of the transgene is going to be and how that's reflected in their metabolic syndrome. So their metabolic syndrome could be improved for a year or two and then require re-dosing or it could be longer. So it's really going to depend on the indication, the disease and the individual patient with regard to the effect that they get from the initial dose of gene therapy. So it's very clearly going to be complex, but the main issue is that if we have the opportunity to re-dose individuals, it's going to be a huge advantage to treating these genetic diseases.

[Difei Yang:]

Thank you, Peter for that information. So just moving onto from strategic standpoint, we have been hearing all the AAVs especially in kind of situation, durability is the current construct are losing durability over time pretty quickly. So would you consider getting into chem A using the ImmTOR platform?

[Carsten Brunn:]

Just, sorry Peter, to remind everyone that we actually do have an existing partnership with Spark and actually Spark has exclusive rights to chem A.

[Difei Yang:]

Thank you.

[Carsten Brunn:]

And just Peter - plenty other liver based diseases that are of interest as well. So…

[Operator:]

The next question comes from Chad Messer with Needham & Company. Please go ahead.

[Chad Messer:]

Can we maybe revisit the rationale for dosing in gene therapies, where kind of get ready to get the clinical data later this year? I know we learned a lot from the 212 program in all the patients we dosed there. But how confident are you in the translate ability of that data, which is in an enzyme over to identifiable viral vector and re-dosing there with some chronic dosing for gene therapy is obviously, as we've discussed - different and potentially more complicated. Just wondering why and how confident you are in the transit lead ability of that clinical data? And obviously I'm sure you've got other evidence from preclinical studies and things too.

[Carsten Brunn:]

Yes, that's a great question, Chad. And obviously I mean one of the key drivers. And as said, we have almost 300 patients dosed is the large safety database that we have with ImmTOR, with up to six months now and in the Phase 3, we are going to be dosing up to 12 months. So that's definitely gives us confidence on the safety side of things. We had significant interactions with the FDA around ImmTOR, which gives us confidence. And then obviously we're building on the preclinical data we've seen so far. And most recently the non-human primate data we're very encouraged. We're able to prevent the formation of neutralizing antibodies. I think one of the key differences as you said, gout is kind of almost like a chronic intermittent treatment approach. Gene therapy will be obviously much fewer treatments, which means you can potentially play with dose of ImmTOR, which we're exploring with the ImmTOR capsid study where we're looking at three doses of ImmTOR. I mean, just to remind you, I mean we have demonstrated in a number of different indication approaches that ImmTOR is pretty much agnostic to the antigen. So, but obviously the proof will be in the human studies and that's really our key focus for 2021 to demonstrate that.

[Operator:]

The next question is from Ram Selvaraju with H.C. Wainwright. Please go ahead.

[Boobalan Pachaiyappan:]

This is Boobalan dialing in for Ram Selvaraju and thanks for taking my question. First of all, could you please comment on the enrollment status of the DISSOLVE trial? And do you plan to doing interim analysis, sometime in 2021?

[Carsten Brunn:]

Yes, that's a great question. So, as mentioned, we have started both studies. We started DISSOLVE I in September, DISSOLVE II in December of last year. We are on track enrolling those studies. And we will be releasing topline data in the second half of 2022 and we don’t plan to have any interim analysis at this point.

[Boobalan Pachaiyappan:]

All right. That's understood. In terms of your collaboration with IGAN Biosciences. So what are some of the gating items that are remaining to advance the candidate to the human trials? And specifically what metrics will be evaluated doing this deal process in addition to evaluating the candidate will not immunogenicity?

[Carsten Brunn:]

Yes, I'll let Kei address this. And obviously we’ve guided that we are currently doing, worked on the IND enabling studies, where immunogenicity is a key driver. But I’ll let Kei comment in more detail.

[Takashi Kishimoto:]

Sure. I’m happy to. Can you just repeat the question? I didn't catch the first part of it.

[Boobalan Pachaiyappan:]

With respect to the collaboration with IGAN Biosciences. So I'm curious what gating items are remaining to advance the candidate to the human trials? And what metrics will be evaluated during the due process. In addition to evaluating whether the candidate will not illicit immunogenicity?

[Carsten Brunn:]

Sure, yes, as you know for filing the IND, we need to produce IND enabling pharmacology and toxicology studies. So that will involve combinations of the IgA protease with ImmTOR molecule. Ultimately though, I think our goal is to get into the clinic as quickly as possible. Because I think there is good pharmacological rationale-based on published studies showing that the IgA protease can debulk IgA new complexes in animal models. And as we have a lot of clinical experience using ImmTOR. So, I think that combination makes sense, because right now the main limitation of IgA, using IgA protease for the treatment of IgA nephropathy is the immunogenicity.

[Boobalan Pachaiyappan:]

Okay. So moving forward with your MMA program, so I'm curious what is your current standard of care for MMA. And how much it cost to treat and MMA patients in the United States? And what unique features of MMA-1 will accelerate its clinical development and market adoption?

[Carsten Brunn:]

Yes, I'll let Peter speak about this. But I mean really right now the treatment options are fairly limited. And it's really - its liver transplantation is the only approach right now and then off the times bears its own risks and limitations, since you have to immune suppress for lifetime basically. But I'll let Peter talk - address this question. Peter?

[Peter Traber:]

Sure, the approach to MMA at this point is really - dietary restrictions reducing the amount - intake of foods that can be - that need to be metabolized by the pathway, and then intermittently treating the episodes of metabolic crisis that these children have. In general, care beyond a liver transplant, which although it doesn't completely cure the disorder, it markedly improves their outcomes. So - that's really the approach at this point. In terms of the cost of care, I really can't give you a number for that. But I will say that, these children are basically in intensive observation and care. Almost their entire lives with often stays in the hospital of up to months when they have metabolic crisis. So, the cost of care is enormous. I just can't put a particular number on it at this point.

[Boobalan Pachaiyappan:]

That's understood. And one final from me, do you think ImmTOR will be equally effective in mitigating immunogenicity, regardless of the serotype of AAV vector being used?

[Carsten Brunn:]

Yes, I'll let Kei answer this. Obviously, we have done quite a bit of work - and looking at various serotypes. Kei?

[Takashi Kishimoto:]

Sure, yes so we've looked at multiple serotypes including AAV8, AAV5, AAV4 and . And really it's consistent with our other preclinical data that ImmTOR is agnostic to the antigen. So whether, it's an enzyme or capsid or some other therapeutic protein or auto-antigen. We've seen preclinical data to support the mitigation of the immunogenicity.

[Operator:]

The next question comes from Derek Archila with Stifel. Please go ahead. Derek, is your line muted? Can you hear us?

[Unidentified Analyst:]

This is on for Derek. Thanks for fitting us in here and taking our questions. I guess, on your gene therapy programs first on MMA-101. How many patients worth of data should we expect? And then what in the biomarker data could we look to as signs of activity for the therapy? And then if I may, on your ongoing 399 study. Other than antibody formation, what also are you looking to glean from the study that could help us further derisk the technology? Thanks.

[Carsten Brunn:]

Yes, thanks Jock for the question. I'll let Peter, once again - handle this one to meet more color on the MMA study.

[Carsten Brunn:]

Okay, thank you, Carsten. So for the MMA study, the efficacy endpoints that we're going to be looking at are as Carsten mentioned earlier are going to be biomarkers of enzymatic activity. So one of the obvious ones is MMA levels in the serum, but there is a very specific and test called of propionic acid - which has been developed by our clinical collaborators at the NIH. That will be used to measure activity of the enzyme. It's a very sensitive and validated test for looking at the enzymatic activity. And it's the enzymatic activity that is going to determine the clinical outcomes in the patient. So, we'll be measuring both of those as endpoints in the initial trial. The other aspect of course in an initial trial was safety and we're going to be focused on that, as well as the neutralizing antibodies and other immunologic T-cell markers and so forth that might be affected by ImmTOR treatment. So, it will be an extensive evaluation of both the disease, as well as the immunogenicity and in terms of the empty capsid study. In addition to the neutralizing antibodies we’ll also be looking at other immunologic biomarkers that - will be looking at in an exploratory way. And then of course, a key aspect of that trial will be safety. So first time that AAV vector has been administered with ImmTOR. And so, that safety analysis will be - will kind of setup future human trials as well.

[Operator:]

This concludes the question-and-answer portion of the call. I will now turn the call back over to Selecta's CEO, Carsten Brunn for closing remarks. Carsten?

[Carsten Brunn:]

Thank you, operator and thank you to everyone who joined us this morning. Please stay safe and healthy. And this concludes today's call. Thanks again.

[Operator:]

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