Genocea Biosciences, Inc.

Good morning, and welcome to the Genosha third quarter 2020 conference call. At this time, all participants are in listen-only mode. Following the formal remarks, we will open the call up for questions. Please be advised that today's call is being recorded at the company's request. At this time, I would like to turn the call over to Dan Ferry of LifeSci Advisors. Please proceed.

Thank you, operator, and good morning, everyone. Earlier today, we issued a press release that outlines the topics we plan to discuss today. This release is available at Genosha.com under the Investors tab. During the call today, Chip Clark, President and CEO, will provide a brief corporate update, and the company's Chief Financial Officer, Diantha Duvall, will review the financial results. After the prepared remarks, we will open up the call for Q&A, and Chip, Diantha, Tom Davis, Genosha's Chief Medical Officer, and Jessica Fleckner, Genosha's Chief Scientific Officer will then be available to answer your questions. Before we begin, I would like to remind everyone that statements made during this conference call relating to Genosha's expected future performance, future business prospects, or future events or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from those forecast due to the impact of many factors beyond the control of Genosha. Genosha expressly disclaims any duty to provide updates to its forward-looking statements whether as a result of new information, future events, or otherwise. Participants are directed to the risk factors set forth in Genosha's 2019 Annual Report on Form 10-K, and other periodic reports filed with the Securities and Exchange Commission. It is now my pleasure to pass the call over to Chip.

Thanks, Dan, and thank you all for joining us today. Genosha had an eventful third quarter, so let me jump right in. I'll start with Gen 11, our adoptive T-cell therapy designed to improve upon the limitations of TIL and TCRT therapies. We think of Gen 11 as a new third category of neoantigen T cell therapies. We call the category NPTs or neoantigen targeted peripheral T cells. In September, we announced that the FDA accepted our IND application for Gen 11, allowing us to initiate what we're calling the Titan study. a phase 1-2A trial to treat patients who have failed standard of care checkpoint inhibitor therapy. The trial will evaluate safety, T-cell proliferation and persistence, as well as clinical activity. Genosha plans to enroll up to 24 patients across several tumor types in two dose cohorts. In one, patients will receive multiple low doses of Gen11 with low-dose IL-2 and without lymphodepletion. In the other cohort, patients will receive a single Gen11 dose after lymphodepletion, followed by high-dose IL-2. We believe Gen11 may offer efficacy, accessibility, and cost advantages over TIL and TCRT therapy. The efficacy advantage stems from ATLAS, our neoantigen selection platform. Gen 11 includes CD8 and CD4 positive T cells only for the ATLAS-identified neoantigens driving antitumor responses and excludes T cells to protumor inhibigens. With these T cells, we will target up to 30 neoantigens per patient, ensuring a broad antitumor attack. there are two accessibility advantages. First, by using T-cells taken from peripheral blood, we avoid the challenges of extracting sufficient TILs from tumors, which may make some patients ineligible for TIL therapy. Second, Gen11 is HLA agnostic, meaning it should work in any patient regardless of their genetic makeup. The cost advantages also derive in part from our use of peripheral T-cells. Using such cells, we do not need the extra time or cost associated with the sterile tumor resection necessary for till extraction. Also, our planet T cell expansion process does not engineer the T cell and is robust and highly scalable. We, of course, aim to begin to demonstrate these benefits in the ongoing clinical trial. Next, I'll turn to Gen 9, our neoantigen vaccine program. In July, we presented initial clinical data for the first five patients from Part B of our ongoing Phase 1-2A clinical trial with Dr. Maura Gillison, a renowned professor of medicine at the MD Anderson Cancer Center and the lead investigator of the trial. Part B of the study is exploring the combination of Gen 9 and checkpoint inhibitor-based regimens in advanced solid tumors. Genosha shared follow-up clinical response and immunogenicity data from the same five patients at the European Society for Medical Oncology, or ESMO, Virtual Congress 2020. The incremental findings demonstrated tumor reductions or stable outcomes for all five patients, suggesting Gen 9 vaccination could be used in combination with CPI-based therapies to augment their effect. In addition, 100% of patients demonstrated immune responses to ATLAS-identified neoantigens. We look forward to reporting additional clinical and immunogenicity data from these and the remaining Part B patients during the 2020 Virtual Society for Immunotherapy of Cancer, or CITC, annual meeting from November 9th to 14th, as well as during a conference call on November 9th at 8.30 a.m., Details for this call will be provided in the coming days. Also at CITSE, we'll provide a detailed technical introduction to Gen 11 and share new insights on the utility of inhibogens as identified by Atlas. I'm now going to pass the call over to Diantha to summarize our financials from this quarter before opening the call up to questions. Diantha?

Thanks, Chip, and good morning, everyone. In July, we closed a private placement with a combination of new and existing investors for net proceeds of $74.5 million. The proceeds will be used for continued advancement of Gen 9, Gen 11, investment in Atlas, and general corporate purposes. Our operating results for the quarter ended September 30th, 2020 are as follows. R&D expenses were $7.5 million compared to $6.8 million for the same period in 2019. The increase in R&D is primarily due to an increase in costs associated with Gen 11 and Atlas, partially offset by a decrease in costs associated with Gen 9. G&A expenses were $3.6 million, compared to $2.8 million for the same period in 2019. The increase in G&A is primarily due to an increase in rent, legal, consulting, and other professional fees. Other income and expense includes a fair value adjustment for liability classified warrants issued in connection with the 2018 and 2020 private placements, partially offset by issuance costs associated with the 2020 private placement. And our net loss was $4.6 million compared to $7.5 million for the same period in 2019. The decrease in our net loss is primarily due to the fair value adjustment that I just mentioned, and the issuance costs and the partially offset by the issuance costs in that same private placement. Our diluted earnings per share reflect an adjustment to both the numerator and denominator attributable to the warrants issued in the 2020 private placement. Our financial position for the quarter ended September 30th includes 87.6 million of cash and cash equivalents and we believe this cash will be sufficient to fund our operations to mid-22. With that, let's now open up the call for questions. Operator?

Ladies and gentlemen, if you have a question or comment at this time, please press star then one on your touch-tone telephone. If you'd like to withdraw your question, please press the pound key. Please stand by, we compile the Q&A roster. And our first question. comes from Ben Burnett from Stiefel.

You may proceed. Just a quick one first on Gen 9. I guess what's been your experience with the manufacturing of Gen 9 and Part B, and has this been relatively consistent with the party experience just in terms of the timeframe, the success rates?

Hi, Ben. It's Chip, and thanks for the question. The short answer is yes. It's been quite consistent with Part A. We've made vaccine for every patient. We've reliably been able to make most of the peptides that we wanted for the vaccine, and the needle-to-needle time, which we previously reported to be in the neighborhood of 16 weeks, has been consistent for Part B. And, of course, you know, we anticipate that. with further investment and at scale, we could make that go much faster.

Okay. Very helpful. Thank you. And maybe just one more on Gen 11. So, I think you've stated that the Phase 1-2, just in terms of endpoints, you talked about measuring clinical activity in terms of response rate, duration response, and so forth. But you've also talked about assessing the degree of tumor penetration. I was just wondering if you could provide a little color around that, just in terms of how you measure this, and just curious if you have an expectation for what you wanna see here in terms of tumor penetration, just based on other cell therapy studies.

Yeah, Ben, so I'm gonna turn that question over to Jess.

Sure, thanks for the question, Ben. We will be looking on tumors, in tumors, I should say, by immunohistochemistry and by some TCR sequencing to identify how infiltration into the tumors may or may not have changed after treatment and looking to see if there are TCRs that are consistent with those in the drug product. So as for what we expect, we can't say until we see. But if we are successful, we anticipate that there will be an increase in infiltration to the tumors relative to the baseline biopsy.

Okay. And if I could just clarify, these are from a biopsy of the target lesion?

For the patients where we can get a biopsy post-treatment, yes.

Okay. Okay, great. Thank you very much. Thanks, Ben.

And our next question comes from Ted Messer with Needle & Company. You may proceed.

Great. Good morning. Thanks for taking my question. Just interested for the Titan study on the rationale for the two different dosing arms, you know, what data you or others have generated to have you interested in looking at multi-low versus single high doses and And then just any sort of guidance, even if it's vague, on what we should be expecting about timing on hearing something from that trial.

Chad, thanks for the questions. I'll take the second question and then hand it over to Tom to tackle the first. It's just a little bit too early for us to begin to give guidance on the clinical trial and when to expect data. We want to really see it get off the ground a little bit longer before we make any concrete predictions about the time to data. But I will say that the clinical trial, as far as we can tell so far, is getting off to a nice start. So I'll now ask Tom to handle the question of the rationale for the two different dosing cohorts. Tom? Thanks, Jeff. Hi, Chad.

So the trial design, important to keep in mind, that this is a first-in-human trial with a novel technology, and there certainly is always a question about the safety of a new cell product that's targeting a novel group of targets in this particular case. So, of course, the phase one is looking at a dose escalation with one cohort receiving a lower dose, and then the second basically receiving a regimen very similar to what's used in the TIL process. Of course, the TIL process has been shown to be active, so we are expecting a lot from that particular arm. But I will add that the TIL process includes chemotherapy for lymph depletion as well as high-dose IL-2 in order to drive cell growth. And the low-dose cohort for us is also intended to determine whether or not we might have activity in patients who cannot tolerate that intense TIL therapy. So I certainly look at both arms as being a potential treatment for different patient populations, the lower dose for those who are more sensitive to the toxicity and then the high dose for those who can tolerate it. As I said, the safety will be a key part of any Phase I, but we're very much looking to see what kind of tumor reductions we can achieve with these treatments. So I think we'll get a lot of very useful information from both arms.

Great, thanks, so that's very helpful in terms of setting my expectations for the two dosing arms, so thank you. Sure.

Thanks, John.

And our next question comes from Joe Pagans with HC Rainway. You may proceed.

Taking the question. Wanted to focus on Gen 11 also, specifically on manufacturing. I guess First, what is the general time of the process relative to Gen 9? And then both currently and your future needs with regard to manufacturing, what are your current capabilities to be able to manufacture this highly scalable asset as you've described, and what are your future needs for manufacturing? Thanks a lot.

Yeah, thanks, Joe. I'll have Jeff take both questions.

Thanks, Joe. The time for manufacturing is actually a little bit shorter than what we have done for the vaccine. So we are looking forward to continuing to deliver very quickly. And in fact, we actually have a path for how to continue to make it faster and commercializable. So we're really excited to get this going. With respect to what we have right now, we are working with With contract manufacturing organizations, we are working in a scalable system that is closed so that we can really rapidly scale up when we need to. And so we're confident that we have what we need in place to successfully execute on this trial, and we are planning for success, and we will be ready to capitalize on success once we have it.

And with regard to your future needs, how long do you think you'll be in the hands of a CMO versus wanting to bring things in-house?

Well, as you can imagine, we're working on those scenarios right now, so I'm not ready to make any statements about when that could happen, but we are planning for success and planning for how we will scale out.

Absolutely. Fair answer. Thanks, Jess.

Thanks, Joe.

And our next question comes from Diana Graybosh with SVV Lerink. You may proceed.

Beyond Tech is also presenting a poster on their Legacy NEON program, you know, similar to Jenny Levin. I just wonder what you think or what you'll be looking for in their poster and how we should think about comparing the early data we see from both companies.

Dana, we didn't hear the first part of the question, but if the totality of the question was what we're expecting to see from the BioNTech poster.

Yeah, and how we should think about comparing it to Gen 11.

Yep, to Gen 11.

Because they're going to have data from their cell therapy.

Got it.

Neon legacy cell therapy.

Understood, understood. Well, we don't know what they're going to be presenting, of course, but I think in some ways there are similarities between the two programs in that we are both using peripheral blood to expand on antigen for dosing. And I outlined the potential advantages such an approach has over TIL therapy and or TCR therapy. we remain confident based on the comparative data we've generated in our respective vaccine programs that our antigen selection platform Atlas should make a decisive difference. We've, we've shown comparatively, um, you know, superior breadth of immune response and magnitude of immune response. And we think that that augurs well for a general 11 as well. And so, You know, we would expect to be able to include more of the right antigens, T cells to more of the right antigens and to exclude T cells to the wrong antigens, and therefore we should expect superior clinical activity going forward. That said, we, of course, look forward to see whatever progress they may have achieved. I believe they started their clinical trial maybe a quarter before us.

That's great and very helpful. Maybe one more follow-up on this? The other sort of thinking about this therapy that we've been doing is on the TIL side, I guess there's a company, Achilles, that has clonal neoantigen approach, of course using TILs and not peripheral T cells. And I wonder how we should think about ATLAS and clonal neoantigens or what you think about that approach.

Yeah. So I'll ask Jess. to speak to how we think about clonal neoantigens and their relevance in this context.

Sure. Thanks for the question, Dana. We think that, you know, it is true that clonal antigens are important because they are thought to be necessary and present in all of the tumors because they were responsible for probably the cancer forming to begin with. We believe that we are finding T cell responses to these truncal neoantigens as well as to other neoantigens that may be unique to each patient's tumor. And so by definition, we will be addressing both. And what we know from our research studies and from our clinical trial patients to date, when we look at what makes an antigen an antigen or what the targets are, we actually don't see any enrichment for these types of targets in terms of what the patients are making responses to naturally. And so by having a breadth of responses that we will have in Gen 11 as well as we have in Gen 9 is going to target both truncal and passenger mutations and really, we think, have an all-out assault on the tumor.

Helpful.

Thank you. Ladies and gentlemen, this concludes our Q&A portion of today's conference. I would now like to turn the call back over to Chip Clark for any closing remarks.

Thank you very much, Operator, and thanks to everyone for joining us today.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.