Conference Transcript - CADL 2026-08-12

John Newman, Analyst — Canaccord Genuity

All right. Good afternoon, everyone, and thank you for joining us at the 46th Annual Canicor Genuity Growth Conference here in sunny Boston today. I'm John Newman. I'm one of the biotech analysts here at the firm. Very excited to have Candel with us today. We're joined by Dr. Francesca Barone, the Chief Scientific Officer. Welcome. First question, for anyone that's not familiar with Candel, and everyone should be, Could you give us an overview of the company and specifically your lead asset, agalatimogene?

Francesca Barone, Board Member

Thank you, John, for having us here today. So Candel Therapeutics is a biopharmaceutical company developing off-the-shelf viral immunotherapies. These drugs are aimed at local delivery to achieve systemic immunization. And we have two clinical assets. One is aglatimagen-Besadenovac, or aglatimagen, I would refer to that. And it was also called 2409, so some of the literature still refers to that. And that is an off-the-shelf replication defective adenovirus. It delivers a gene, tumidin kinase, is given together with the pro-drug, and the aim is basically to induce immunization, in situ-immunization of the patients against the tumor-owned antigens. The main indication is localized prostate cancer. We had unveiled in 2024 a positive phase 3 randomized trial results where aglutimogen demonstrated superiority around 30% to reduce disease-free survival risk for patients treated with aglutimogen as compared to patients treated with standard-of-care radiation. this asset is also in development for non-small cell lung cancer we've completed a phase two study in this indication and we just very recently started recruitment for a new registrational potentially registrational phase three study called aurora in non-small cell lung cancer patients with non-squamous disease that are non-responsive to fast line checkpoint inhibitors this is stage four disease. This is the first clinical asset. We have another clinical asset. It's a classical oncolytic virus. This is called linocerpaturev, previously known as 3110. This is a classical oncolytic that is the first in class for its modification. It's been modified to selectively replicate within a tumor cell that express the nesting promoter, and this asset has been developed in brain cancer. So both for aglutimogen and for linocerpatrius, we had lots of interactions with the FDA. The phase three trial that I mentioned before for aglutimogen has been developed in prostate cancer under a special protocol assessment. It received a fast track designation as well as the ARMA designation. And the ARMA designation has been received by the FDA after study readout. So with the phase three study readout data, we went to the FDA and we got ARMA designation. And that enables us a very strict communication with the FDA that is extremely useful since we are gearing up to file a PLA for a glutinogen by the end of the year. And Linus Erpatorev also had fast-track designation for the development in the brain cancer indication and orphan drug designation as well.

John Newman, Analyst — Canaccord Genuity

Okay, great. Thank you. And I believe Ken Dell will be presenting additional prostate cancer data at Astro 2026 this September. I wonder if you could just describe in general what we might expect to see in that update and how it might further support the positive data that you've already shown there?

Francesca Barone, Board Member

Sure. So first of all, as I mentioned before, we've achieved positive, the primary endpoint of the study under the SPAD in 2024, where we demonstrated this ability of aglutimogen to delay recurrence of prostate cancer. Now, as a part of the original primary endpoint of this trial, we had the possibility of obtaining biopsies from the patients. And the biopsies were pair biopsies, obviously baseline, and biopsies at two years post the end of radiation. And this material is extremely interesting because it will enable us to investigate changes that have happened to the tumor microenvironment at the site of injection. So what we've done, and it's part of our presentation at Astro, is an AI-enabled digital pathology analysis on these slides of the two-year post-treatment biopsies that will enable us to really see what changes aglutimogen makes on the top of radiation. And so we're going to report a series of histological parameters. We had already disclosed at the time of data readout the ability of aglutimogen to induce an increased number of pathological complete response, meaning absence of the tumor at the two-year biopsy. We had 80% as compared to 63% that was the data in the control arm. But now we're going to look at this a little bit more in detail and using the digital pathology quantification of immune cell aggregates, differential distribution, a series of parameters like, for example, the closeness of the immune cell to the cancer cell. that is a very good readout of some of the mechanistic aspects that then underpin the clinical effect. It is important to say that, obviously, we had already proved what the mechanism of action of a glutinogen in other indications. We also had it in prostate cancer. We had a very early study in pre-prostatectomy, but this is going to be the first evidence of biological engagement of the immune system at the site of biopsies from the phase three trial.

John Newman, Analyst — Canaccord Genuity

Okay, great. And as you mentioned just a moment ago, you've guided to a BLA submission in prostate cancer by the end of this year, 2026.

Francesca Barone, Board Member

Just curious how that process is progressing and just generally speaking, what your interactions with the agency have looked like? so the process is progressing very well it's busy we've been extremely busy particularly I think these past two years have been extremely focused on execution of the elements that we needed to put in place in order to have a successful filing and this has been mainly focused on manufacturing we had already just before they studied it out to scale up the manufacturing for the product for the for the production of the commercial product to the scale that we're going to use for the commercial product that is the 200 liters but there was still quite a bit to do and what was left for us to do was the PPQ campaign and we can say that we've been you know extremely successful so far we had like we're around three quarters down to the PPQ campaign. We are in close contact with the FDA through this process because one element that is extremely important for the filing is to have alignment on the comparability process. Obviously in the clinical study we had a non-commercial lot. It was a clinical lot that has gone into these patients. Now we have a new process. The process had to be changed because to modernize some of the aspects related to it. And so we've been really busy in producing evidence that the two processes are comparable and the product that comes out of the two processes is comparable. And this is what we have, we've been doing. This is through the, all under the umbrella of the ARMA designation that enable us to have a frequent meeting with the FDA. Every meeting is a type B meeting we have a 60 day turnaround so we had the possibility to check with them what was our plan for comparability and very recently we had a meeting in which we align on the comparability protocol that will be executed at the end of the ppq campaign the other element that is has been important for this and fill out some of the activities for the past two years is the stability so the product that comes from the new process has to be put on stability to create what is going to be the indication for the shelf life of the product at the time of launch and and we have product on stability now we're generating this data and we're putting together the module trade

John Newman, Analyst — Canaccord Genuity

all gearing up at the moment for the timeline of submission by the end of the year okay great um just curious uh what type of feedback have you received from uh key opinion leader physicians on the prostate cancer that you've generated thus far. And how clinically meaningful do you think and do they think is the 30% reduction in disease recurrence that you've seen?

Francesca Barone, Board Member

Yeah. So this is a part of a very exciting activities that we're taking at the moment, right? So we're taking these two years really to help us to create this relationship with future prescribers and so we started all the activities related to medical affair and commercialization among which obviously gearing up getting feedback on our um on our drug so the feedback has been encouraging extremely encouraging um there is a lot of excitement this will be the first drug in this space in more than 20 years right the alternative in this space is really uh radical radiotherapy or radical prostatectomy and there is excitement for a glutinogen when we discussed the data the disease-free survival the physician found this be a meaningful improvement in particular because the next line of therapy for patient that failed radiotherapy or failed radical prostatectomy is ADT and we are particularly selective of the patient obviously with radiotherapy. And there is a rate of recurrence in this patient that is 30% for the intermediate risk population and up to 50% in the high risk. So it's a reality. And for this patient, the next line is ADT. ADT is a drug that works, but it's a drug that nobody really likes. A physician don't like to prescribe it, neither patient like to take it because of the complication of the side effects related to this drug, right? There is an effect on the quality of life and comes with the series of morbidity that is sometimes intolerable for the patient. So patients tend to be against the prescription, but also tend to have very poor adherence to that. So there is excitement on that respect, and the physician finds this a meaningful improvement. On the top of this the data that we presented in the spring to aua in which we've reported long-term outcomes in additional exploratory clinically purely clinically endpoint has been extremely exciting for the physician so what we've reported at aua is that that dfs improvement translates as we are predicting actually in longer time to metastasis longer time to biochemical failure a longer time to new anti-cancer treatment. And this is a validation of our hypothesis that the DFS endpoint, and in particular the data that we were obtaining from the two-year biopsies, were going to be correlating with long-term improvement in these patients. And this is what we see. We see a clear separation of the curve. So patients treated with aglutinogen have got longer time to metastasis, less incidence of metastatic disease, and longer time to this next line of therapy. And this is clinically meaningful.

John Newman, Analyst — Canaccord Genuity

Okay, great. And a follow-up on a point you just made regarding androgen deprivation therapy. Eclatimogene has demonstrated a benefit regardless of whether patients have received androgen deprivation therapy or have not received it. again how important is it to reduce or avoid ADT from the physician perspective and how important do you think the flexibility is that you can give your product whether or not they've received it I think it's extremely important I was just coming back from one of the PCF the prostate cancer foundation conferences so this is a consensus at alpha consensus process in metastatic disease, and I think there were a lot of discussions in the community in the sense

Francesca Barone, Board Member

that the community of physicians want to really identify the patient that will benefit from ADT because of that very unfavorable benefit to risk, you know, associated with the use of ADT. Unfortunately, ADT is a drug that works, right? I mean, we have plenty of evidence in randomized clinical trials, but patients don't like to take ADT. We had some of the physicians that gave us feedback and said, you know, patients don't feel men from the day after they start ADT. On the top of it, obviously, there are effects on the musculature, there are effects on bone loss and so on. And there are the cardiovascular risk. And there are many patients that cannot take ADT, So they cannot even take the advantage of that despite the side effects. So the possibility of delaying and in total reduce the number of years so that this patient will have ADT is absolutely a goal. The curative intent that you have when you treat a patient with localized prostate cancer shouldn't have to be paid with the price of ADT. And that's why some of the patients who want to get a radical prostatectomy, they want avoid the ADT because they think that the risk associated with getting ADT if they get radiotherapy is higher, right? So the possibility of getting a drug like a glutinogen that is only injected three times and that's it, and then you have this long-lasting benefit definitely outweighs the issue with the ADT. So we are very aligned with this community of physicians that don't want to prescribe ADT, and with the patients that don't want to take ADT. This is what we hear also when we discuss with patients. We've been starting all these activities also to understand from their point of view what they feel about this therapy. So I think that's one of our strongest aim. And you're right, the benefit of aglatinogen is independent of the use of ADT. Despite the study was not really power to look at subgroups, the directionality of the response there is very clear.

John Newman, Analyst — Canaccord Genuity

Okay, great. And how are you thinking about the commercial opportunity in localized prostate cancer? And do you think a therapy like eglatimogene might encourage more patients to opt for radiotherapy rather than surgery?

Francesca Barone, Board Member

So you're not the first person that tell us that. So first of all, you know, we designed the study to really target the population of patients that are treated with radiotherapy. And this is a very large population. 65,000 patients per year get diagnosed with localized prostate cancer and will undergo radiotherapy, will choose radiotherapy. And this is 40% roughly of the overall population of patient intermediate high risk patient with localized prostate cancer that get diagnosed. So this is a 60-40 split. If we look just specifically at this population we are thinking about a commercial opportunity that goes between 10 to 16 billion so it's it really uh high up in in the in the projection that we have now if we think about the way in which some of the physician have feedback us about this therapy we've always thought okay it's going to be three opportunities you're going to either go to radical prostatectomy or radiotherapy or radiotherapy plus aglatimogen and actually the physician look back at us and say well no we see this as two possibilities radical prostatectomy or radiotherapy plus aglatimogen because really they see the value of that now can this translate in the future in what you were saying that more and more patients we choose radiotherapy to avoid that It is a possibility. It's not at the moment embedded in our forecast, so we've been extremely conservative, but yes, it is a possibility because some patients decide to undergo radiotherapy because they don't want to incur the risk of having to use ADT. So if we decrease that and improve the ability of radiotherapy to be efficacious in diminishing the possibility of recurrence, there is that possibility. And we heard that also from some physicians.

John Newman, Analyst — Canaccord Genuity

Okay, great. And shifting over to non-small cell lung cancer, you recently initiated a registrational study here. Very exciting. Could you walk us through the clinical design there?

Francesca Barone, Board Member

Sure. So we had a very positive end of phase two trial meeting with the FDA, and we brought them a clinical study that was focused specifically in the non-squamous population of patients with stage four disease that were non-responsive to ICI. So these patients were either previously responsive or presenting SD after the first-line treatment, and they were coming after 12 weeks. So classical study design according to the CITC guidelines. And the FDA agreed to this study design. So what we are planning to do is to recruit 500 patients. It's going to be a one-to-one randomization. The control arm is very clear dosotaxel. This is the cockroach in the treatment, as they define it, in the treatment on no small cell lung cancer. The endpoint is median overall survival, and the median overall survival for docetaxel is around 12 months. It's been confirmed over and over again in phase 2 and phase 3 studies. None of the current medicine in development have beat the 12 months. And so we've been finding ourselves really the possibility to power the study using the data from our phase two study. So what we've done is that we've looked specifically at the non-squamous histology, those who are the patients that responded better to aglatimogen. In this patient, we've achieved a median overall survival of 24.5 months. But we've been very conservative. We looked at the intent to treat population in the non-squamous subpopulation. And we've seen that even in this, we achieve a median overall survival of 17 months. So we largely exceed the 12 months. We think we can even improve that. Why? Because we know now that if we inject a patient specifically in the thorax with agletimogen, we improve that survival. And the other aspect is that we've been better at understanding how our drug works. So we knew that we had some patients in which we had pseudoprogression. And at the six-week scan, some of the physicians were feeling a little bit nervous and taking the patient off study. So we had some patients that didn't even get the second injection of aglatimogen. And we really think that the course of two injections, when you have a primer and a booster, is necessary in order to have the full effect. And so we think that we can even improve that. So we've been conservative in our estimate for the study design.

John Newman, Analyst — Canaccord Genuity

Okay, great. And could you talk about, excuse me, how agglutimogene is administered in lung cancer? Is the goal to inject every accessible lesion or is there evidence that the treatment could generate a broader systemic immune response such that you may not have to inject every single lesion that the patient has?

Francesca Barone, Board Member

Absolutely. So in no small cell cancer, we inject, first of all, we only give two administrations of alglotimogen, so two injections. And you don't need to repeat the injection more than two times, because you really have this effect of primary booster that I was alluding to before, where you inject either the same lesion or two different lesions, and you achieve a long-lasting process of insight to immunization. Now, what is important is that we've already described changes in the tumor microenvironment, activation of the immune cell at the site of injection. We proved that through longitudinal biopsies, but we've also proved a clear systemic effect. We've reported biomarker data in the phase two study where we show an activation of the T cells, generation of a memory response with activation both of the CD8 and the CD4 compartment, activation of the B cell response. And most importantly, this translates in a clear clinical effect in non-injected lesion. We had regression of non-injected lesions, and we reported that as a scopal effect, looking both at overall responses or 5%, including only 5 patients that had more than 5% shrinkage of non-injected lesions. And we reach that in around 60% to 70% of the patients, so if you consider the totality, or only the more than 5%. So really, we have evidence of a systemic response. You don't need to continue giving this over and over again because it's the ultimate medicine here at the T-cell that get educated to recognize the tumor. So they can go from the tumor microenvironment, patrol around, and recognize metastatic sites. And this is clearly evident both from the biomarker and from the clinical data.

John Newman, Analyst — Canaccord Genuity

Okay, great. Thank you. So I want to talk a bit about recurrent glioblastoma for CAN 3.1.1.0 here for a moment. So you have an ongoing program here in recurrent glioblastoma. Could you remind us again of a mechanism of action?

Francesca Barone, Board Member

Yes. So this is different from a glutimagen. This is 3110, or Linocerpaturev, it's got its new generic name. This is a classical oncolytic virus, but it's a fasting class for the modification that has been made to this virus. The mechanism of action is related to this ability of the virus both to replicate and kill tumor cells. This is directly injected in this case, and the indication is recurrent igreglioma, so it gets injected through bear holes into the tumor directly. But it's also capable for the modification that has been made to the virus itself to induce a very strong immune response, both locally, that is almost unheard of in the space of glioma that is classically super cold tumor microenvironment, but also in the systemic circulation. So the data of this has been published in science, the original description of this virus, and then in nature, and more recently in science translational medicine and in cell, we have clear evidence of activation of the immune system. The modification is that this is a fasting class because it's the only virus in which the gene responsible for replication has been deleted but reinserted under the nesting promoter. That really enables this capability of the virus to kill specifically, replicate and kill tumor cells whilst activating the immune response. We are really excited about the data that we generated in this indication. We had achieved a median overall survival of 12 months after a single injection. We're now going to disclose at the end of the year new data on the multiple injection cohort and also follow up on the patient that had long survival. We've reported already that a couple of the patients in our phase one trial survived more than 49 months, 50 months. So it's quite unheard of in the space of recurrent glioma.

John Newman, Analyst — Canaccord Genuity

Excellent. Well, it looks like we're out of time. I wanted to thank you, Francesca, for joining us today. Also, thank you to the Kandel team. Thank you to the investors here in the room in Boston and everyone on the webcast.

Francesca Barone, Board Member

Thank you.