Earnings Call Transcript - MRKR Q3 2020

Operator, Operator

Good afternoon, everyone, and welcome to the Marker Therapeutics conference call. This call is being recorded. I will now turn it over to Mr. Tony Kim, Chief Financial Officer at Marker. Please proceed.

Anthony Kim, CFO

Thanks, and welcome, everyone. The press release reporting our financial results is available in the News section of our corporate website at markertherapeutics.com. As a reminder, we will be making forward-looking statements regarding our financial outlook in addition to regulatory, product development and commercialization plans and research activities. These statements are subject to risks and uncertainties that may cause actual results to materially differ from those forecasted. A description of these risks can be found in our most recent Form 10-Q and 10-K on file with the SEC. I would now like to turn the call over to Peter.

Peter Hoang, CEO

Thanks, Tony. Good afternoon, and thank you for joining us today. I hope everybody continues to be safe and healthy during this challenging time surrounding the pandemic. Given the external situation, particularly around COVID-19, in May, we made a decision to withdraw our prior guidance on the timing of our planned Phase II trial in patients with acute myeloid leukemia, or AML. While certain factors still remain in flux, specifically around our clinical and supply chain partners, I'm extremely happy to report that this quarter, we were able to initiate our first Marker-sponsored trial in post-transplant AML, having enrolled the first patient in the safety lead-in portion of that trial. I will note that we were able to achieve this milestone consistent with the guidance that we provided prior to May, despite the significant disruptions we saw throughout our clinical and supply chain landscape. We currently have several sites open and enrolling patients. Our Chief Medical Officer, Dr. Mythili Koneru, will provide further details surrounding our AML trial in just a moment, and we look forward to taking your questions at the end of today's call. In addition to initiating our Phase II trial, we're also making significant progress with the build out of our new manufacturing facility and are on track to complete its construction by year-end. With that, we expect the facility located in Houston to be operational in early 2021, at which time, we will have the ability to independently manufacture product to support our Phase II AML trial and potential future trials. In addition, we have been hard at work evaluating the manufacturing process and have made several adjustments that we believe will maximize efficiencies and streamline our manufacturing process as a whole. Our Chief Development Officer, Dr. Juan Vera, has joined us today to provide details about these important process improvements. Before I conclude, I want to acknowledge our research, process development, regulatory, clinical and quality teams for their hard work and commitment to advance our AML trial despite the challenging external situation. As a reminder, today, adult patients with post-transplant AML have a 25% chance of five-year survival. The start of this trial is a significant milestone for our company and a critical first step towards potentially bringing a novel therapy to the thousands of patients who are running out of viable treatments. At this time, I'd like to hand over the call to Dr. Koneru. Mythili?

Mythili Koneru, Chief Medical Officer

Thank you, Peter. As you just heard, this has been an important quarter for us as we begin enrolling in the safety lead-in portion of our Phase II clinical trial in patients with post-transplant AML. To briefly recap, in February 2020, we announced that the FDA lifted the clinical hold on this trial, permitting us to initiate the safety lead-in portion, which is expected to enroll approximately 6 patients. 3 patients will be dosed with zelenoleucel, or MT-401, our lead product candidate, manufactured with the legacy reagent, which was used in the Phase I trial conducted by our partners at the Baylor College of Medicine. The remaining 3 patients will be dosed with study drug manufactured using a new reagent from an alternative supplier. The study remains on partial clinical hold pending the review of the final data and subsequent acceptance of the certificate of analysis for this new reagent by the FDA. In parallel to working with our supplier to receive the required information satisfactory for lifting the partial hold, which we anticipate could be in Q1 of 2021, our team remains hard at work identifying trial sites and enrolling eligible patients in currently open sites. At this time, we have 4 sites that have been activated and can enroll patients, and we plan to have an additional 2 to 3 sites by year-end. Moreover, beginning next year, we will open approximately 20 sites in total for the Phase II portion of the study. We are making solid progress and have already enrolled our first patient and anticipate treating this patient by January or earlier. To give you a clearer picture of the treatment challenges faced by oncologists today and why we are so encouraged by this data in the post-transplant AML setting, I would like to briefly review some important details about this devastating disease. According to the American Cancer Society, there will be about 60,000 new cases of leukemia in 2020, with about 20,000 of those representing AML patients. The mainstay treatment today is chemotherapy, sometimes in combination with bone marrow transplant. But unfortunately, approximately half of the patients will relapse post-transplant, many within the first year, thereby highlighting the unmet medical need. Our cell therapy was designed to address the shortcomings of current treatments while maintaining patient safety. Many cellular therapies in development today are pursuing a single or even dual target. However, this approach has demonstrated limited improvements in patient outcomes. In contrast, we believe our multi-antigen approach has the potential to induce a lasting antitumor effect by allowing the patient's own T cells to expand and kill cancer cells. By targeting multiple antigens and epitopes present within the tumor, we believe our Multi-TAA T cell therapy can effectively address tumor heterogeneity while recruitment of the endogenous immunity leads to amplification of immune response by epitope spreading. The Phase II study represents our first company-sponsored clinical trial. As a reminder, MT-401 was granted orphan drug designation in post-transplant AML and has been well tolerated in an ongoing Phase I clinical trial conducted by our partners at the Baylor College of Medicine in this setting. As reported in March 2019, 11 of the 13 patients in the adjuvant setting, dosed with the MultiTAA-specific T cell therapy after receiving an allogeneic stem cell transplant derived, ranging from 6 weeks to 2.5 years post-infusion, while 9 of these remaining patients are continuing complete remission, or CR. Survival of the 6 patients with active disease ranges from 4 to 21 months as compared to a historical survival rate of approximately 4.5 months for patients who received the standard of care post-transplant. In the Phase I study conducted by our academic collaborators at BCM, our product has shown to be well tolerated with no incidence of cytokine release syndrome, neurotoxicity, or grade 3 to 4 GvHD in the post-allogeneic setting. Importantly, it demonstrated antitumor effects as well as significant in vivo expansion of T cells. To this end, we believe our novel MultiTAA-specific T cell therapy could potentially offer clinical benefit for these patients without the toxicities of standard-of-care treatment. We continue to be encouraged by this early data and are looking forward to working with our clinical sites to continue enrolling patients in our Phase II study. As a reminder, this multicenter AML study will be evaluating the clinical efficacy of our product in patients with AML in both an adjuvant and active disease setting, following an allogeneic stem cell transplant. The dose administered will be the maximum tolerated dose from the Baylor-sponsored Phase I study. In the adjuvant setting, approximately 120 patients will be randomized 1:1, either MT-401 at 90 days post-transplant versus standard-of-care observation, while about 40 patients with active disease will receive MT-401 as part of the single-arm group. The primary objectives of the trial are to evaluate relapse-free survival in the adjuvant group and determine the complete remission rate and duration of complete remission in the active disease patients. Additional objectives include, for the adjuvant group: overall survival in graft-versus-host disease; relapse-free survival; while additional objectives for the active disease group include: overall response rate; duration of response; progression-free survival; and overall survival. And with that, I'd like to hand the call over to Dr. Juan Vera, our Chief Development Officer.

Juan Vera, Chief Development Officer

Thank you, Mythili. As Peter mentioned earlier in the call, we have continued to make solid progress with the build out of our new manufacturing facility, which will be used to support the manufacture and potential commercialization of MT-401 and other MultiTAA-specific T cell products. When we first envisioned this facility, we also began thinking more critically about the manufacturing process and how to improve it. As a consequence, for the past 12 months, we have been working diligently to simplify and streamline the manufacturing process while improving the T cell phenotype and the antigen specificity of the final drug product. Improvements, which should have an impact on the clinical performance of the drug product in the upcoming clinical study. These manufacturer optimizations can be categorized under two major areas: technical and biological. Today, we have incorporated several technical improvements such as a 50% reduction in the manufacturing time, cutting the production to only 16 days, resulting in a decreased vein-to-vein time and increased throughput of the manufacturer. Second, a decrease in the number of technical interventions by approximately 95%, simplifying dramatically the complexity of the manufacturer and potential risk of contamination. A third technical improvement includes the increase of the consistency and reproducibility of the manufacturing process, which will reduce the potential of manufacturing failures. Finally, despite the reduction in the manufacturing time, we're now able to produce a significantly higher number of T cells, not only ensuring patients will be able to receive the required cell dose in the upcoming clinical study, but also providing us with an opportunity to potentially increase the cell dose in the future. While those technical improvements will allow the manufacturing process to be faster, simpler, more reproducible at a larger cell dose, they're particularly significant due to biological improvements that demonstrate the drug product, not only to be the same, but better. Due to a favorable T cell phenotype, a more potent T cell product with a greater magnitude of antigen specificity and a more diverse targeted profile. The combination of these technical and biological improvements will be critical in the clinical performance of the upcoming study in AML, for which we're really excited. With that, I would like to turn the call to Tony Kim, our Chief Financial Officer, for a review on financials. Tony?

Anthony Kim, CFO

Thanks, Juan. We ended the third quarter with $27 million in cash and cash equivalents. We raised $2.2 million in Q3 through the $30 million common stock purchase agreement we previously entered into with Aspire Capital. Utilizing the remaining $27.8 million available to us from Aspire and with current cash available, funds our operations into Q1 2022. Net loss for the quarter ended September 30, 2020 was $7.4 million compared to a net loss of $5.5 million for the quarter ended September 30, 2019. Research and development costs during the 3 months ended September 30, 2020 were $4.8 million compared to $3.1 million during the 3 months ended September 30, 2019. The increase of $1.7 million was primarily attributable to an increase in research and development personnel as well as an increase in process development expenses. General and administrative expenses were $2.6 million during the 3 months ended September 30, 2020 compared to $2.5 million during the 3 months ended September 30, 2019. Now, before we open up for Q&A, I wanted to summarize the upcoming milestones for the company. We enrolled the first patient in our AML trial and expect to treat this patient with our MT-401 product by Q1 2021. We received the alternate reagent for a manufacturing process and plan to submit the required data to the FDA to lift the partial clinical hold in Q1 2021. We've entered the final stages of construction of our cGMP manufacturing facility and expect to complete the construction in Q4 and begin treatment of the first patient under the new facility in the first half of 2021. At this time, we'd like to open the call up to questions. Operator?

Operator, Operator

Our first question today is coming from Matt Biegler from Oppenheimer.

Matthew Biegler, Analyst

Congrats on this really, really nice forward progress. Peter, could you just walk us through the logistics of enrolling these lead-in patients, specifically how you're sourcing the grafts, and then the turnaround time you're expecting from signing the consent to actual treating? And just to be clear, are you using the new manufacturing process for these lead-in patients?

Peter Hoang, CEO

Matt, thanks for the question. That's a great question. We are using the new improved manufacturing process for all of the patients that will be treated in our Phase II clinical trial. But with respect to your question, let me turn it over to Mythili Koneru, to talk about the patient intake process and the donor procurement process.

Mythili Koneru, Chief Medical Officer

Thank you for your question, Matt. Regarding the safety lead-in, we have enrolled the first patient. The process requires the investigator or oncologist to submit an enrollment form. After we receive it, we review the patient's information and determine whether the donor is a matched-related donor, a matched-unrelated donor, or haploidentical, as all three are options in the study. If the donor is a matched-related donor, we need to schedule them with the institution or site. However, if the donor is matched-unrelated, we must use a matching service to obtain consent and arrange for the donor's apheresis. The timing can vary; typically, scheduling is quicker for family member donors, while it takes longer for matched-unrelated donors due to the need to reidentify and consent them before scheduling. Regarding the manufacturing process for the safety lead-in, we will be producing at Baylor College of Medicine. However, for the Phase II portion of the study, manufacturing will take place at our in-house facility. Juan can provide more details on that. Juan?

Juan Vera, Chief Development Officer

Sure, yes. I think one of the questions that you mentioned was related to the incorporation of the new CMC updates. And just to confirm, as Peter mentioned, these patients that will be treated in the safety lead-in will be generated using the new manufacturing process that now are in file with the FDA. And as Mythili mentioned, the safety lead-in portion of the study will be manufacturing drug product out of our collaborators at Baylor College of Medicine, and we anticipate that our manufacturing facility will be operational for the manufacture of the second portion starting next year.

Matthew Biegler, Analyst

Got it. Awesome. Maybe just one more question for me. I wanted to ask about dosing for the Phase II. As I understand, Baylor is now exploring a high dose. I think it's like 100 million cells per meter squared. Do you have any update on that cohort? And also, do you have any intention to explore that dose in your Phase II AML trial? Or are you pretty set on the dose that you have right now?

Peter Hoang, CEO

My?

Mythili Koneru, Chief Medical Officer

Thank you for your question, Matt. That is accurate. Baylor College of Medicine still has their Phase I study open, and they are currently investigating higher doses. They are exploring dose level 4 at 50 million cells per meter squared and dose level 5 at 100 million cells per meter squared. We have completed and transitioned to a flat dosing of 50 million cells. We are in close communication with Dr. Premal Lulla, the investigator of the Phase I AML study at Baylor College of Medicine. We are monitoring the study closely to determine when dose levels 4 and 5 are finished and when we can incorporate that information into our Phase II study, particularly in the safety lead-in before the Phase II study begins. As Juan has mentioned, we are making several improvements in the manufacturing process, and we believe we can manufacture more easily at these higher doses. In summary, we are interested in possibly exploring higher doses depending on how the remaining part of the Phase I study at Baylor is completed.

Operator, Operator

Our next question today is from Tony Butler from ROTH Capital Partners.

Unidentified Analyst, Analyst

This is Stefan on for Tony. I was wondering if you could provide some updates on when we might expect further information on the pancreatic cancer data after what you presented at ASCO.

Peter Hoang, CEO

Thanks very much. My, would you like to take that?

Mythili Koneru, Chief Medical Officer

Thank you for your question. Regarding the pancreatic Phase I study at Baylor, we currently do not have any new updates. Baylor shared their latest findings during the virtual ASCO in June of this year. The study has completed enrollment with a total of 13 patients, and no further patients will be added to that part of the study. The only additional information that may be relevant pertains to longitudinal endpoints, particularly overall survival. We are in discussions with Baylor to determine the appropriate time to collect and share that information.

Operator, Operator

Ladies and gentlemen, we have concluded our question-and-answer session. I will now hand it back to management for any final remarks or closing comments.

Peter Hoang, CEO

Thank you very much, and thank you once again to everyone for joining the call today. We appreciate your time and hope that you and your families are remaining safe and healthy during this pandemic. Stay well, everyone, and please reach out to us for any additional questions.

Operator, Operator

Thank you. That does conclude today's teleconference. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.