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spk04: Good morning, everyone, and welcome to the Selectus first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. Please be aware that today's conference call is being recorded. I'd now like to turn the conference over to your first speaker, Arthur Strill, Interim Chief Financial Officer. You may begin.
spk11: Good morning, and welcome, everyone, to Selectus' first quarter 2024 corporate update and financial results conference call. Joining me on the call today are Dr. André Choulika, our chief executive officer, and Dr. Mark Fertini, our chief medical officer. Yesterday evening, Selectus issued a 6K and a press release reporting our financial statements for the three-month period ending March 31, 2024, and a corporate and business update. The report and press release are available on our website at selectus.com. As a reminder, we will make statements regarding Selectus' financial outlook, including the sufficiency of cash-to-fund operations, in addition to its manufacturing, regulatory, and product development status, as well as product development status of its licensed partners. These forward-looking statements, which are based on our management's current expectations and assumptions, and on information currently available to management, including information provided or otherwise publicly reported by our licensed partners, are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in our most recent Form 20F filed with the Security Exchange Commission, SEC, and the financial report, including the management report for the year ended on December 31st, 2023, and subsequent filings selected makes with the SEC from time to time. I would now like to turn the call over to André.
spk09: Thank you, Arthur. Good morning, and thank you, everyone, for joining us today. Last November, we were excited to announce our strategic collaboration and investment agreement with one of the most impressive pharmaceutical companies of the past decade, AstraZeneca, to design and shape next generation of cell and gene therapies. In this agreement, AstraZeneca made an initial investment of $105 million to select this, composed of an $80 million equity investment in exchange of 16 million ordinary shares at $5 per share, and a $25 million upfront payment under the joint research collaboration agreement. This month, we're proud to announce the closing of the additional equity investment of $140 million by AstraZeneca. As part of the additional investment, AstraZeneca subscribed for 10 million Class A convertible preferred shares and 18 million Class B convertible preferred shares in each case at a price of $5 per convertible preferred shares. AstraZeneca owns approximately 44% of the share capital of Selectis and 30% of the voting rights. In addition, the appointment of Mr. Marc Dinoyer and Dr. Tyrell Rivers as members of the board of director of Selectis is now effective. Following AstraZeneca's additional investment, we expect our cash runway to fund operations Into 2026, Selectus will continue to focus its efforts and expenses on advancing its core clinical trials, Bally 01, Natalie 01, and Amelie 01, our wholly owned assets, while building the next generation of genomic medicine to address areas of high unmet patient needs within our partnership with AstraZeneca and within our proprietary preclinical pipeline. We strongly believe that gene-edited cells and gene therapies are revolutionizing medicine across a number of therapeutic areas and will become a large part of molecular medicine in the future. Quarter, we have also announced the appointment of Arthur Strill as Interim Chief Financial Officer following the resignation of Bing Wang. First of all, I would like to warmly thank Bing for the great two years he has been at Selectus. It has been a huge honor and a pleasure for us all to work alongside with him and wish him great success in his next adventures. Arthur has been managing Selectus business development and portfolio management teams since 2020 and most recently led the execution of company strategic collaboration investment agreements with AstraZeneca. Through his past responsibility, Arthur has deep knowledge and detailed understanding of Selectus. He will be of tremendous value to Selectus as Interim Chief Financial Officer as we advance our critical pipeline of assets into expansion and pivotal trials and explore new opportunities. With that, I would like to turn the call over to Dr. Mark Fratini, our Chief Medical Officer, who will give an overview of our clinical trials. Mark, please go ahead.
spk07: Thank you, Andre. As Andre mentioned, Selectus continues to focus its development efforts on the Bali-01, Amelie-01, and Nazili-01 studies. Last December, we shared updated clinical data in a poster from our BALI-01 trial at the American Society of Hematology annual meeting. In vitro comparability studies suggested that UCART22P2 manufactured in-house by Selectus is significantly more potent than UCART22P1 manufactured by an external CDMO. As of July 1st, 2023, three patients were enrolled in the first UCAR22P2 cohort at dose level 2, 1 million cells per kilogram. UCAR22P2 was administered after fludarabine, cyclophosphamide, and altuzumab lymphodepletion and was well-tolerated. No dose-limiting toxicities or immune effector cell-associated neurotoxicity was observed. The cytokine release syndrome observed was limited to grade 1 or 2. There was a higher preliminary response rate of 67% at dose level 2 with 1 million cells per kilogram using UCART22P2 compared to a 50% response rate with a dose five times higher at dose level three, 5 million cells per kilogram, using UCAR22P1 that was manufactured by an external CDMO. UCAR22 expansion was observed in the responding patients and correlated with increases in serum cytokines and inflammatory markers. The study continues to enroll patients using UCART22P2. I will now speak about our NAATOLI-01 study, a phase 1 2A dose finding and expansion study evaluating UCART20 by 22 in relapsed refractory B-cell non-Hodgkin lymphoma. UCARTS 20 by 22 has been fully manufactured in-house by Selectus at a Raleigh manufacturing facility. Selectus presented a poster with the preliminary results from the NUTSLEA-1 trial at the annual ASH 2023 meeting in December. As of July 1st, 2023, three patients were enrolled and treated at dose level one, 50 million cells, flat dose. Cytokine release syndrome grade 1 or 2 occurred in all patients and resolved with standard of care treatment. No immune effector cell-associated neurotoxicity or graft-versus-host disease was observed. There were no UCAR 20 by 22 dose-limiting toxicities, and there was one dose-limiting toxicity related to allamtuzumab, a CLS-52. All patients responded at day 28 with one partial metabolic response and two complete metabolic responses in patients who had failed prior autologous CD19 CAR T-cell therapies. UCAR 20 by 22 expansion correlated with increases in serum cytokine and inflammatory marker levels, as well as with CRF. These initial data with all three patients responding at the starting dose of 50 million cells per patient support the continued study of UCART 20 by 22 in relapsed refractory B-cell non-Hodgkin lymphoma. The study continues to enroll. Lastly, I will speak about our Amelie 01 study evaluating UCART 123 in patients with relapsed refractory AML. The Amelio-1 study continues to progress and is currently enrolling patients after fludarabine, cyclophosphamide, and alantuzumab lymphodepletion in a two-dose regimen arm. With that, I would like to hand the call over to Arthur Strill, Selectus' Interim Chief Financial Officer, for an overview of our finances for the first quarter of 2024. Arthur, please go ahead.
spk11: Thank you, Marc and Andre. I'm very excited to step into the role of interim CFO and continue working with Selectus' team, shareholders, and partners at such an important moment for the company. I would like to highlight that in our financials, the cash, cash equivalents, restricted cash, and fixed-term deposit classified as current financial assets as of March 31st, 2024, amount to $143 million, compared to $156 million as of December 31st, 2023. This $13 million decrease is mainly due to cash payments from Selectus to suppliers of $13 million, including $9 million to R&D suppliers and $4 million to SG&A suppliers. Selectus' wages, bonuses, and social expenses paid of $15 million, the payments of lease debts of $3 million, and the repayment of the PGE loan of $1 million, partially offset by the $16 million cash received from EIB pursuant to the disbursement of the 15 million Euro tranche B and $2 million of cash in from our financial investments. With cash and cash equivalents of $123 million and a $15 million term deposit maturing in May 2024, classified as a current financial asset as of March 31st, 2024, And taking into account the $140 million equity investment received on May 3rd, 2024 from AstraZeneca, pursuant to the subsequent investment agreement, the company believes its cash and cash equivalents will be sufficient to fund its operations into 2026, and therefore for at least 12 months following the unaudited interim condensed consolidated financial statements publication. The consolidated net income attributable to shareholders of Selectis was $5.6 million, or a .08 income per share, for the three months ended March 31st, 2024, compared to a $30.1 million loss, or a .58 loss per share, for the three months ended March 31st, 2023, of which $27.8 million was attributed to Selectis continuing operations. This $38.2 million difference was primarily driven by an increase in revenues and other income of $2.9 million, a decrease of $0.7 million in non-cash stock-based compensation expense due to a decrease in the average unit fair value of stock options and free share awards between the two periods, a $30.7 million change from a net financial loss of $4.4 million to a net financial gain of $26.3 million, and a decrease in net operating expense of $0.6 million, and a $2.5 million decrease in net loss from discontinued operations attributable to shareholders of selectors, partially offset by an increase of $1.3 million in purchases, external expenses, and an increase of $0.4 million in wages. The consolidated adjusted net income attributable to shareholders of Selectis was $6.5 million, or $0.09 income per share, for the three months ended March 31st, 2024, compared to a net loss of $28.1 million, or $0.55 loss per share, for the three months ended March 31st, 2023. We are focusing our spend on developing our clinical candidates UCAR22, UCAR20x22, and UCAR123, and operating our state-of-the-art cell and gene therapy manufacturing facilities in Paris and Raleigh. Research costs under the AstraZeneca collaboration are funded by AstraZeneca. In addition, our focus on maintaining an efficient corporate infrastructure should also enable more limited growth in DNA spend. And now, I would like to turn the call over to André for closing remarks.
spk09: Thank you, Arthur. To close out this call, I would like to reiterate how excited we are about our strategic collaboration with AstraZeneca and how much confident we are about the continued progress of our three ongoing clinical trials in hematological malignancies, as well as our continued development of our clinical programs. Selectives, we strongly believe that our product candidates Our technologies, our in-house manufacturing capabilities will lead us and our partners to a paradigm shift for patients with hard-to-treat cancers, positioning us at the forefront of this promising medical and scientific field. With that, I would like to open the call for Q&A.
spk04: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Gina Wang with Barclays. Please proceed with your question.
spk05: Thank you for taking my questions. Also want to congrats on the completion of AstraZeneca deals. So now with AstraZeneca on board. So wondering if there any strategic change regarding the strategy from a selective perspective and also how much AstraZeneca can have access to your manufacturing capability and both in New Jersey and in Paris. And lastly, very quickly regarding, you know, the upcoming data by the year end 24, I assume you very likely will be at ASH. Can you give us, you know, the status of the enrollment for both Valley and Natalie 01? And what kind of data sets should we expect to see?
spk11: Great. Thank you so much, Gina. This is Arthur. I'm going to take the first question on the strategy and the AstraZeneca piece, and then I'll hand it over to Mark for the data updates. So, I mean, we're obviously very excited to have completed the subsequent investment and now have AstraZeneca fully on board. I mean, as you have seen from their recent disclosures, they're betting very hard and very long term on cell and gene therapy, and having them as a strong partner across a number of indications, not just oncology, but also immunology and rare diseases, is going to be very important. So the strategy on our wholly owned asset has not changed. We're still pushing 22, 20 by 22, and 123 very hard. And Mark will give you an update on where we stand. Obviously, the big change is we are going to be doing these novel programs with them across a wide range of indications in the cell and gene therapy space. And we also have a new strategic shareholder that is strongly invested in the space and that has this long-term vision, which we're very excited to have. Regarding your question on manufacturing, so as you know, under the collaboration, we're going to do up to 10 cell and gene therapy programs together. And the agreement allows for the possibility for AstraZeneca to leverage our manufacturing capabilities both the starting materials but also the final cells that we have in Raleigh for Selectis to be manufacturing these programs. So that's definitely one of the drivers of the interest of AstraZeneca. And maybe I'll hand it over to Mark for the data updates.
spk07: Hi, Gina. It's Mark. Thanks for the questions. And I think, as you know, our last disclosure for data was at ASH last year in December. We have continued to enroll obviously on both of these studies. You asked about 22 and 20 by 22. We expect to have data disclosure at the end of the year this year for both of these studies. Regarding 22, ideally we will be completing the expansion part of the 22 study this year. So we'll move ahead from that. And for 20 by 22, we continue enrollment and expansion and actually hopefully we'll be in the same place near completion of the escalation phase by the end of this year.
spk02: Thank you. Thank you. Our next question comes from the line of Kelly Shee with Jefferies.
spk04: Please proceed with your question.
spk00: Hi, congrats on the progress, and thanks for taking our caution. This is Dave on for Kalishi. So on UCAR 22 by 20, can you add some color how many sites are active right now, and will you be able to identify RP2D by year end? And if you are enrolling three patients per dose level, so should we expect around 10 to 12 patient data by year end? Thank you.
spk07: Hi, thanks for thanks for the question. So, obviously, I can't go into a lot of details about all of the sites, but I can tell you that we have sites open in the US and in the EU, both in France and Spain currently enrolling on this study regarding the progress with 20 by 22. we continue to enroll in the escalation phase and we hope to be completed with the escalation by. uh by the end of this year so to your point in terms of uh you know we would that at that time there would be uh uh rp2d declared as we open the expansion part of the study thank you thank you our next question comes from the line of salveen richter with goldman sachs please proceed with your question
spk01: Hi, this is Lydia on Purcell Bean. Thanks so much for taking our question. Can you provide any further granularity on the cadence of readouts across the programs this year and what your expectations are for the respective data sets? Thanks so much.
spk11: Hi, Lydia. Thank you so much for the question. That's definitely one for Mark.
spk07: Hi, thanks. So, yeah, as you just heard from the prior two, so for 22 and 20 by 2422, we will be completing escalation and we will discuss the data results later this year for 20 by 22 again. We are also continuing enrollment in the escalation with the aims of completing escalation and discussing that at the end of this year as well. And for the 123 study, I think, as, you know, we. We reverted to a new treatment paradigm where we're giving actually two doses of the cells for AML since it's a highly aggressive, highly proliferative disease. And so we continue to enroll in this two-dose regimen part of the cohort. And when we have sufficient data, we will be disclosing that as well, but it continues to actively enroll currently.
spk02: Thanks so much. Thank you. Our next question comes from the line of Jack Allen with Baird.
spk04: Please proceed with your question.
spk13: Great. Thanks so much for taking the questions and congratulations on the progress. The first one was on AstraZeneca. I was hoping you could provide some color as to where things sit as it relates to the collaborative work you're doing with the large pharma here and when we might expect to hear the first program announced. Then I was also hoping you could talk a little bit about how you're thinking about potential plans and autoimmune indications. And then finally, if I may, I wanted to ask about what the expectations are for the year-end updates from Bali 01 and Natalie 01 as it relates to durability. How are you thinking about the bar for success in those studies with the allogeneic platform here?
spk11: Hey, Jack, this is Arthur. Thank you so much for the questions. I'll take the one on AstraZeneca. So the work has definitely kicked out in full gear. There's a ton of discussion and interactions at all level within the AstraZeneca and Alexion teams. So as you know, there was already an initial amount of work that had been done on pre-selecting because AstraZeneca pre-selected 25 targets. So we're starting from a shorter list. And there's a lot of discussion ongoing on selecting the first program and getting them into gear. So we're very excited. And obviously, there's a ton of connectivity between the research teams at all level. And we're looking forward to be providing updates as to the first programs when that makes sense. And I think there's a question on the data for Marc.
spk13: Yeah, I was just wondering if Mark had any thoughts on how we should think about durability and what the bar for durability should be as we look towards the year-end 24 updates and these responses, hopefully.
spk07: Yeah, thanks, Jack. So, yeah, as you know, we're, you know, we will discuss, you know, completion of escalation 422 and continued enrollment and hopefully completion of escalation 420 by 22 as well. I think a standalone product in the disease space, I think, you know, the bars, I think, are, you know, are pretty well set, you know, particularly in terms of what the regulatory agencies would want to see, and particularly in, like, for the relapse refractory ALL space, you know, there would be a three-month, a CR within three-month timeframe is what, you know, is what the agencies would be looking for. And I think for 20 by 22 in the NHL space, we're looking at something closer to six months.
spk11: And Jack, this is Arthur again. Sorry, I didn't mean to skim your question on autoimmune. So this is, I mean, definitely an interesting space that we're monitoring very carefully, and we're looking at the development in that space. It's also a space where we think the allogeneic value proposition is going to be absolutely critical given the size and potential scope of the market opportunity. We want to address it in a smart and thoughtful way, so we're definitely looking into this and monitoring the space. And again, we'll update when it makes sense. Thanks for the question.
spk03: Thank you.
spk02: Thank you.
spk04: Our next question comes from the line of Luisa Morgado with Van Laanschot Kempin. Please proceed with your question.
spk14: Hi, team. First of all, indeed, congrats on the completion of the investment from AstraZeneca. I think most of my questions have been answered so far, but I do have one in terms of the partner programs. Could you just give a brief overview on what we should be... on the lookout, let's say, throughout this year, what would you highlight on that side?
spk11: Thank you, Louisa, for the question. I mean, we talked about AstraZeneca at length. I think I can reiterate the guidance that Allogene has provided on the anti-CD19 and anti-CD70 programs. And obviously would direct to them for future updates. I think the first one is they announced that the startup activities for the Alpha 3 trial, which will be semacell, so previously Allo 501A, in first-line consolidation are ongoing. And they're planning a study initiation in the middle of this year. and they also have an ongoing enrollment in the relapsed refractory CLL cohort for the phase 1 alpha-2 trial also of semacell. So that's going to be interesting to see how semacell moves forward. And they also announced that they're planning by year end a phase 1 data update of the Traverse trial, which is allo-316, the anti-CD7T in renal cell carcinoma. So we're also looking forward to this.
spk14: Okay, that's all for me.
spk02: Thank you so much.
spk04: Thank you. Our next question comes from the line of Yigal Nakamovitz with Citi. Please proceed with your question.
spk10: Hi, this is Amin for Yigal. Thank you for taking our questions. We had a couple. First, on dose expansion strategy, do you see a scenario that the dose expansion studies could convert to registrational studies And if so, what would be the timeline look like? And then the second, I wanted to know what you think the target population would be for a registrational trial. Is that going to be something like a relapsed refractory following the CD19 treatment?
spk03: Hi, thank you so much. I think these are two great questions, definitely for Mark. Mark, we can't hear you. Sorry.
spk07: Pardon me. I was on mute. Thank you for the question. So, I think in terms of the expansion part of the studies, yes, indeed, these could potentially be pivotal expansions at this level. As you know, however, this, in terms of number of patients and timeline, et cetera, will require some additional discussions with the regulatory authorities in order to nail this down. So these are things that are actively being discussed at this time. I think in terms of your other question, in terms of target populations, I think particularly in the, in both disease spaces, I think for 22, we're talking about relapse refractory ALL, as you know. And these will include patients who have received prior CD19-directed CAR T cell therapy or patients for whatever reason could not be eligible to receive prior CD19 CAR T cell therapy. And a similar situation in terms of the relapse refractory non-Hodgkin lymphoma space as well.
spk03: Okay, great. Thanks very much for taking our questions.
spk04: Thank you. Our next question comes from the line of Yanan Xu with Wells Fargo. Please proceed with your question.
spk12: Hi, thanks for taking our question. This is Quan for Yanan. So two questions from us. First of all, 22 and 20 by 22, can you remind us what dose level has been planned for the studies and Are you planning to also explore fixed dosing for 22? And the second question is, any colors on the safety data from the patients beyond ASH update for these two studies? Thank you.
spk11: Great. Thank you so much for the two questions, also for Mark.
spk07: Yes, thank you for the question. In terms of the dose level, I mean, what we've disclosed to date is that originally for 22, we were at 1M cells per kilo at dose level 2. And for 20 by 22, we were at 50M cells flat dose. Obviously, we have been escalating those since the last data disclosure and We will update later this year in terms of where we're landing in terms of dose levels for both of these studies. I missed the one question. You asked something about dosing with 22. I missed that. Could you repeat that, please?
spk12: Yeah, sure. Just curious if you are also planning to explore fixed dosing for 22.
spk07: Now, for 22, we're going to keep a weight-based dosing, obviously, because of the great age criteria in terms of this study from the very young to the very old. So, we will, like most studies in the ALL space, continue with a weight-based dosing for 22.
spk12: Any colors on the safety data from patients beyond the ASH update? Thank you.
spk07: Yeah. So, so far we have not disclosed. We will later this year. As you know, so far the both products were very safe and well tolerated with no DLTs related to the cells and no graft versus host disease and no ICANNs and the CRS limited to grade one and two.
spk03: Thank you for the callers.
spk04: Thank you. Our next question comes from the line of Hartaj Singh with Oppenheimer. Please proceed with your question.
spk06: Hey, everyone. Thanks for taking the questions. This is for Hartaj. We have questions for 20 by 22. So as we talked before, it seems like half of this program has a great potential and EU market because like last competition there. So can you elaborate to talk about that? Thanks.
spk11: Thank you so much for the thoughtful question. I'll leave it to Mark.
spk07: Yeah, thank you. So yeah, as you point out, there is You know, just based on the slide availability for autologous CAR T cell therapy in the EU, it is much less than the US. So there is, you know, there is a need for this in the EU, you know, as well, obviously. And so we have opened up, as I said earlier, we have sites in France and sites in Spain that are currently open. And we obviously will be looking to open other countries as well.
spk02: Got it. Thank you.
spk04: Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Shulika for any final comments.
spk08: Well, thank you very much everyone for your time. It was really appreciated to have all these questions and enthusiasm and we're really excited by 2024 and what's going to happen in the coming years after 2526. I think the company is within a year where things are. Meaningfully changing on the shape of the company. And I'll give you. rendezvous for the next time. And I think that we'll share more of the execution inside the company. Thank you very much and wish you a good day.
spk04: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.
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