Earnings Call Transcript - PGEN Q2 2024

Operator, Operator

Good evening and welcome to the Precigen’s Second Quarter and First Half 2024 Financial Results Call. At this time, all lines are in a listen-only mode. Following the presentation, there will be a question-and-answer session. Please note, this event is being recorded. I would now like to turn the conference over to Steve Harasym, Vice President of Investor Relations. Please go ahead.

Steven Harasym, Vice President of Investor Relations

Thank you, Jenny, and thank you to everyone joining us this afternoon. With me today are Dr. Helen Sabzevari, President and CEO of Precigen; Harry Thomasian, our CFO; Phil Tennant, our Chief Commercial Officer, and our Chief Operating Officer, Rutul Shah. Before we begin, let me briefly review our forward-looking statements. During today's call, we will make various forward-looking statements. Investors are cautioned that our forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those indicated by forward-looking statements. Please read the Safe Harbor Statement contained in our most recent SEC filings, as well as the risk factors contained in Precigen’s filings. With that, I would like to now turn the call over to Dr. Sabzevari. Helen?

Helen Sabzevari, President and CEO

Thank you, Steve, and thank you to all joining us today. It is a pivotal time at Precigen as we work hard to get what could be the first FDA approved treatment for the devastating recurrent respiratory papillomatosis disease, or RRP, to the market. What I would like to do at the beginning is take you through some of the key programs and business highlights and then go through some of the strategic prioritization that has been communicated recently. Let me start by talking about PRGN-2012, which is the focus now of our portfolio. PRGN-2012 is our adenovirus gene therapy, designed to elicit immune responses directed at HPV6 and HPV11 infected tumors and to raise the immune system to both of these epitopes for the treatment of recurrent respiratory papillomatosis. Let's establish some of the facts upfront in regard to our PRGN-2012. It's delivered by our gorilla adenovectors and does not require any kind of device. So, it's an ease of administration that can be done in any office setting, for instance. The second important part of this gene therapy treatment is that our gorilla adenovectors platform is differentiated from other viral vectors. Even though there is a perception that all viral vectors are similar and can only be given a limited number of times, this does not apply to the gorilla adenoviruses. Humans either have zero pre-immunity or very little pre-immunity to these vectors. These vectors are designed to elicit high affinity T-cells and enhance CD8 responses. In various clinical trials we have conducted, we have shown that you can keep re-dosing with these vectors and continue to enhance the immune responses, particularly high affinity CD8 T-cell responses. One of the differentiating factors of our gorilla adenovirus platform is that these vectors allow for a high payload, enabling us to target multiple epitopes and genes. Regarding PRGN-2012, it's the first drug ever to receive a breakthrough designation and an accelerated path from the FDA in June 2023. We also received the orphan drug designation from the FDA and EMA. Our clinical trial was designed to address advanced patients with the highest number of surgeries, leading to robust endpoints, which included safety and efficacy that lead to a complete response. The FDA agreed that our Phase I single-arm trial and our Phase II single-arm trial could serve as pivotal trials without requiring randomization or placebo control. This was because the patient population is their own best control, which is important. We enrolled 12 patients in our Phase I and 23 in our Phase II single arms, and we presented the full data set from both trials in June at ASCO. The safety outcomes were extremely favorable, and the efficacy outcomes indicated a complete response, meaning patients went from an average of 4.5 surgeries a year to zero surgery requirements at the 12-month follow-up. We've been following these patients for durability of response, and we've observed significant positive results. 18 out of 35 patients achieved a complete response, translating to 51%. Additionally, 30 out of 35 patients reduced their number of surgeries, which is 86% of the treated population. This represents unprecedented results in treating this patient population. We are excited about the potential for PRGN-2012 to be the first-ever FDA approved treatment for RRP patients, and we anticipate submitting our BLA by the end of this year. We have already initiated our enrollment in the confirmatory trial and have reached an agreement with the FDA that the confirmatory trial does not require a placebo or randomization. This makes it less challenging for patients since each patient serves as their own best control. Our facility for drug substance manufacturing is operational, putting us in a strong position to provide doses for both the US and international markets upon potential launch. Furthermore, as part of our patient advocacy, we organized a joint recurrent respiratory papillomatosis inaugural awareness day on June 11. I believe this therapy is innovative, well-differentiated, and does not require any device, administering it subcutaneously. It elicits immune responses targeting benign tumors caused by HPV6 and HPV11. The median duration of response has not yet been reached but is currently at 20 months, and Phase I patients have surpassed 32 months of durable responses without requiring surgery. We are preparing for potential commercialization of the drug in 2025. I am thrilled to introduce Phil Tennant as our Chief Commercial Officer, who is now leading all commercialization activities for PRGN-2012. Phil, please share your perspective.

Phil Tennant, Chief Commercial Officer

Thank you, Helen. It's great to be here with you. I have nearly four decades of experience in the industry. A common theme throughout my career has been global launch activities. In my recent oncology experience, I've worked in areas with rare diseases that have high unmet needs. PRGN-2012 fits perfectly into this space, and I am excited about the launch potential. Helen summarized the clinical offering very well, and we have seen substantial patient feedback on the meaningfulness of even a single surgery reduction. The commercial team has laid the groundwork for market access and distribution. Now we are ramping up full commercial launch preparations across marketing, sales, and thought leader engagement. It's a critical time in the organization, aligning our activities as we approach the BLA submission and target bringing this treatment to patients in 2025. Given it's a rare disease, the sales team will need to be precise in size, but we must also focus on building a strong medical affairs organization. We remain optimistic about the significant market opportunity based on the high unmet need and safety and efficacy results.

Helen Sabzevari, President and CEO

Thank you, Phil. I want to discuss our strategic prioritization regarding PRGN-2012 and the tough decision to implement a workforce reduction of over 20%. This was essential to redirect resources towards the PRGN-2012 program. In the clinic, we are also implementing various cost-saving measures. For PRGN-2009, focusing on recurrent/metastatic cervical cancer has led to streamlining through our partnerships at NCI and NIH. We have capped enrollment of PRGN-3006 in AML patients. We reported over 27% objective responses, which is promising. However, we have paused the ongoing trials of PRGN-3005 and PRGN-3007 to focus on 2012.

Harry Thomasian, CFO

Thank you, Helen, and good afternoon to all of those on the call today. As Helen mentioned earlier, it is a pivotal time for Precigen with our recently announced asset prioritization and what could be the first FDA approved treatment for RRP patients in the near future. Before I talk about the company finances, I also want to publicly welcome Phil Tennant to the Precigen team. We’re excited about the value that Phil has brought to the table in the short time he’s been with us. I want to first touch on our recently announced prioritization of assets and the successful equity issuance we completed last week. The company expects to significantly reduce future operating costs. Last week's equity issuance netting $31.4 million will provide a runway into early 2025. Our net loss for Q2 was $58.8 million compared to a net loss of $20.3 million in the same period last year. The 2024 net loss includes $32.8 million of non-cash impairment charges specific to our ActoBio business. We have filed our 10-Q along with our quarterly press release with the SEC. You can find more detailed financial information in those documents.

Operator, Operator

Ladies and gentlemen, we will now begin the question-and-answer session. Your first question is from Ben Burnett from Stifel. Please ask your question.

Carolina Ibanez Ventoso, Analyst

Hello, good afternoon. This is Carolina Ibanez Ventoso for Ben Burnett. Thank you for taking our question. Recently a close competitor has announced it has delayed its BLA filing. What are the gating factors for you to commence the rolling BLA submission of PRGN-2012? And this way ensure you keep a lead in RRP.

Helen Sabzevari, President and CEO

Hi, Carolina, and thank you for the question. We are laser-focused on our submissions. As we have guided before, we anticipate submitting our BLA by the end of 2024 and are on track for that. We continue to concentrate on ensuring the treatment is excellent and targeting a potential launch in 2025.

Carolina Ibanez Ventoso, Analyst

Understood. And as a follow-up, given that PRGN-2012 represents a novel therapeutic modality for RRP, do you think you will get an outcome meeting? And what can you do to prepare for it if there is one? Thank you.

Helen Sabzevari, President and CEO

Thank you, Carolina. We can’t predict whether an outcome meeting will happen, as that decision lies with the FDA. However, our Phase 1 and Phase 2 data show remarkable consistency and have met both primary and secondary endpoints. The data is compelling as presented at ASCO.

Operator, Operator

Thank you. Your next question is from Jason Butler from Citizens JMP. Please ask your question.

Jason Butler, Analyst

Hi. Thanks for taking the question. For Phil Tennant, as he joins the company, what attracted him to the opportunity, how he thinks about the opportunity and RRP, and what the priorities will be in the coming months as the BLA is submitted and reviewed by the FDA.

Phil Tennant, Chief Commercial Officer

Thanks for the question. Given my background in oncology and working with rare diseases, I understand the significant impact successful treatments can have. This is a high unmet need and a rare disease, presenting an exciting opportunity. As we move forward, we will assess the commercial opportunity and ensure our footprint is appropriate for market access, engaging with healthcare professionals and understanding the patient journey.

Helen Sabzevari, President and CEO

Thank you, Jason. In terms of strategic prioritization, how should we think about the UltraCAR-T programs? Will we get a clinical update on PRGN-3006 this year? We remain excited about UltraCAR-T as it offers a unique platform for delivering autologous CAR-T quickly and safely. While we are focusing on PRGN-2012 at this time, we continue to monitor the progress of our UltraCAR-T programs and will provide updates on clinical data as necessary.

Swayampakula Ramakanth, Analyst

Thank you. On the PRGN-2012 program, would we see any additional data at all until you start talking about the confirmatory study?

Helen Sabzevari, President and CEO

We have shared comprehensive data from both Phase I and Phase II studies at ASCO. We will not be providing further data prior to submitting the rolling BLA, as we have met and exceeded the FDA's data request.

Swayampakula Ramakanth, Analyst

In terms of applications to regulatory authorities, are you discussing a potential submission in Europe for the same indication?

Helen Sabzevari, President and CEO

Yes, we have already engaged with EU authorities and look forward to potential applications in Europe and other countries. We are preparing our facility for a global launch by 2025.

Phil Tennant, Chief Commercial Officer

We are exploring global opportunities for PRGN-2012. Given the significant disease burden and high unmet need, we aim to assess these opportunities comprehensively.

Helen Sabzevari, President and CEO

I want to thank everyone for your thoughtful questions. We are on a pivotal path toward bringing a much-needed treatment to patients in need. Thank you for your support.

Operator, Operator

Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.