Precigen, Inc.

Good morning, and welcome to the Presagen second quarter and first half 2023 financial results and business update call. Please note, this event is being recorded. I would like to turn the conference over to Steve Harrison, Vice President of Investor Relations.

Thank you, Operator, and thank you for joining us today. With me are Dr. Helen Sabzavari, President and CEO of Presagen, and Harry Tomasi, our CFO. Hello. Helen will provide details on today's releases and an update on our portfolio, after which Harry will review our second quarter and first half 2023 financial results. Following our prepared remarks, we'll open the call to Q&A. Before we begin, let me briefly review our forward-looking statement. 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 our forward-looking statements. Please read the safe harbor statement contained in this presentation, as well as risk factors contained in Presagen's most recent SEC filings for a more complete discussion of these risks and uncertainties. I will now turn the call over to Dr. Sabzavary. Helen?

Helen Sabzavary Thank you, Steve, and thanks to all of you for joining us today. Today is a very exciting day for Precision, and I'd like to provide you with the significant progress that we have made in the first half of this year. I will discuss two major topics today. One is the positive regulatory developments, which we announced this morning for our lead program, PRGN 2012, in an orphan rare disease setting in RRP. And secondly, the portfolio prioritization to focus our efforts to accelerate the development of PRG in 2012 toward commercialization while we continue advancement of our other key programs and extend our cash runways to 2025. With that in mind, let's go to slide number four. We have been, as you know, active in discussions with the FDA to align on a rapid regulatory path for PRGM 2012, given the high unmet need in RRP patients. But there is no approved drugs, and the only treatment options remains is recurring surgeries that are a major burden for these patients, both physically, health-wise, economically. We are pleased to announce that the FDA has confirmed that the ongoing single-arm phase 1-2 study will serve as the pivotal study to support BLA submission for an accelerated approval. At the same time, there is no additional randomized control study will be required to support accelerated approval. And we have agreement with the FDA on endpoints from the ongoing Phase 1-2 study to support the BLA submission, which includes the complete response rate, which is the percentage of patients with no surgical intervention required during the 12 months following the treatment, and an immunological surrogate marker for HPV-specific T cell responses which, by the way, has been already implemented both in phase one and phase two. Precision also has reached an agreement with FDA that a single-arm confirmatory study needs to be initiated, but not completed, and that's very important, prior to the submission of the BLA. At the same token, we are very thankful to the FDA, and they have even encouraged us to add and evaluate the inclusion of exploratory arms to the confirmatory study for a repeat dosing for the non-complete responders to potentially expand the label. And we are very excited about that. The ability of the ongoing Phase I-II to serve as a pivotal for accelerated approval can significantly reduce the developmental time to licensure. And you can imagine what does that mean for our patients, because now the randomized phase 3s are not required here, and we can move much faster, especially as I will go through the path for the licensure for us. To further expedite the development of PRGEN 2012, we are preparing Precision's in-house gene therapy manufacturing facility to produce drug substance for commercial launch. Why are we doing that? Simply, this allows us to maintain control of manufacturing in-house, we leverage our internal expertise, and we reduce the cost and timelines due to reduced reliance on a contract manufacturer. If we look at what has happened under take a moment to recognize the current status of the ongoing single-arm Phase I-II study. As you have seen and we have reported the data, the Phase I has been completed and the enrollment and dosing in the Phase II portion of this study is also completed. Phase II patients follow up, data collection, and the completion is anticipated by the second quarter of 2024. The phase one data that we presented in January has shown 50% of our patients that they were treated at the dose level two have a complete response. And that means they needed no further surgery in the follow up of 12 months. And today, we are pleased to report that all complete responders from the phase one, they remain surgery-free with a minimum follow-up of 18 months, and the responses are still ongoing. We are very pleased and excited about the promise of the PRGN 2012 for RRP patients who received numerous surgical treatments procedures in absence of therapeutic in their lifetime that can be very harmful, financially burdensome to the patients and overall the healthcare system. Getting this therapy as quickly as possible to the patients who need the relief is our highest priority obviously. I'd like to acknowledge at this point the tremendous effort of Precision Team and our investigators and collaborators. to move the PRG in 2012 from discovery phase to a recognition as a pivotal trial on a path for an accelerated approval in about three years, including the pandemic years. With that in mind, if we look at this slide number five, what I would like to highlight is what differentiates PRG in 2012 and the adenovirus platform from the rest. And we have seeked the market and the KOL research, and we have listened to what our KOLs have been telling us, that what is unique and differentiated about this molecule and this platform. As you can see in this slide, one thing that really stands out is the mechanism of action That has been seen as very promising. The physicians described the PRGN 2012 mechanism of action as promising, and particularly they are impressed with this molecule to generate a T cell response that specifically targets HPV6 and HPV11 viral Phytox. which is the root cause of RRP. And this is what is important about this therapy because it goes to the root of the problem, which is the infection in the patients that allows this recurrence of the papillomas in a very, very dangerous regions on vocal cords and trachea and even in the lungs. Secondly, There is a very favorable safety data. We have shown some of the safety data from phase one. And as you can see, and it was mentioned, the safety is grade one and grade two, it's flu-like vaccination. And this is extremely favorable, obviously, for the patients. And the physicians, they appreciate that tremendously. And especially... that some of the patients in the future will be pediatrics, and this clearly is an important factor. And finally, the reduction in the number of surgeries. I think we have heard from our patients continuously that even reduction in one less surgery, it's fundamental to them. And now having complete responders that over 12 months, and ongoing, they do not require any surgery. And by the way, we have been in the most severe patient population, which they require more than three surgeries per year, and being able to accomplish that. So this is quite exciting, and we are really happy for the patients. And finally, this is a platform with a very attractive route of administration. What does that mean? these vaccines have been given subcutaneously to the patients. You can imagine now the patients that they have to go continuously under surgery, now they can go to their physician, basically office, and receive a sub-Q injection very similar to a flu injection. And this is quite an accomplishment and a differentiation. So with that in mind, if we look at the slide number six, And on top of these slides, what you see is the scenario that we are describing in regard to the patient. You are looking at the normal, basically, vocal cord throat of a normal individual. And then on the right-hand side, you are looking at what the RRP patient suffers from. And these patients are dependent on the surgery only continuously. to remove these benign tumors, just to be able to talk or just to be able to breathe. Can you imagine having a child that you have to do this continuously on a monthly basis, take them for this kind of surgery? Obviously, there are no approved therapeutics for the RRP, and this is the importance of the decision of FDA that allowing us to go for accelerated approval, which I'm thankful to the FDA in general for recognizing the need of the patients and also the innovative studies that can be addressing that need. As we have said, the current standard of care is repeated surgeries. And this does not affect the underlying root of this. indication of this disease. Due to the chronic nature of the disease, RRP patients can undergo hundreds of surgeries during their lifetime. And these repeated surgeries, as I mentioned before, can worsen the condition of RRP as it can increase the spread of HPV virus and can result in a significant comorbidity, including loss of vocal functions. There is a significant economic and a quality of life burden of this disease throughout the lifetime of RRP patients. And as you can see on the slide, there are, and these are approximate numbers, that in the U.S. there are 10,000 at least cases of adult and 6,000 of juvenile. And in ex-U.S. there is a much larger population, upwards of 68. And we really don't know the exact number of juveniles, and these are part of the research studies that we will be doing as part of the projected market for the U.S. and ex-U.S. So with the potential now to accelerate towards becoming a commercial estate company and considering the challenging capital markets at this time, We believe that we should be laser focused on expediting the 2012 path to commercialization. By doing this, we believe that we can best position precedent for near-term success in this current environment. On slide number seven, we are highlighting some of the actions that we are taking to realign our resources and pipelines. to realize a substantial savings, especially with respect to external CRO spending and the SG&A costs, compared to the original budget estimates. HARI will further expand on the cost-saving measures we are taking over the past years and the current years. But just to mention, what we are now focused is not only to accelerate the path for PRG in 2012 without damaging the very important other programs that we have, but also extending our cash runway, which allows us to get to the readouts specifically and beyond by various means. So let's go through some of these actions. We are, first of all, reducing the cost of the clinical CROs for outside, reducing the number of the sites that will be involved in various programs as I will go through them. And definitely, we have been reducing our SG&A costs and continue to do so and Harry will highlight that. At the same token, We are redirecting our R&D team to focus on CMC and translational clinical research activities. We have a highly productive and cross-trained team, which currently, as we speak, are involved in shifting focus in order to address the CMC and translational clinical translational work required to support PRGEN 2012 PAD 2 approval. What does this do for us? First of all, there is no reduction in our R&D force. Secondly, this allows us to hold on to our talent without any, again, I stress that, headcount reduction. Furthermore, we will save time and money in trying to adjust the path. And this is very, very important for the very agile timelines that we have for the submission of the BLA. In regard to our PRGN 3006 Ultracar T program, this remains of a high priority for us. As you know, we have shown a positive data at ASH, almost 30% objective response rate in AML patients that they have no other therapy in front of them. And we have received a fast track designation from FDA. With that in view, This is extremely important program. We plan to maintain our two very productive and active sites, Moffitt and Mayo, for the ongoing phase one study for now. We plan still to present the interim phase 1b data in 2024. There will be new initiation of new sites in the remaining part of the 2023. and we provide further updates in upcoming quarterly calls. We also have a plan to give additional clarity on a site expansion in 2024. In regard to PRGN 3005, similarly, we continue our Phase 1B study enrollment at Fred Hutch, and as part of the cost-saving measures, we plan to activate a second site under our CRADA with NCI to continue the advancement of the program without major clinical or CRO costs to us. And that's very, very important for our patients as well as for this program, which is very unique. And with regard to PRGN-3007, obviously that program is investigator-initiated phase one at Moffitt, which is ongoing and continues to move. Now, in regard to what we mentioned for PRGN-2009, especially in a cervical cancer, which is, by the way, on the same platform, adenovirus platform, as PRGN-2012, We are excited to announce that the plan is to activate the NCI site first, and we leverage our CRADA for the phase two study to reduce the clinical cost for this year, and we will be giving update in early 2024 in regard to the other sites. And also, and very important. We have been in discussions with number of parties for non-dilutive funding opportunities, which can even further extend our runway from 2025. We have begun, first of all, the process of a divesting exemplar, and that is important. And I know that Harry will speak to, as we divested, the trans-OVA, and that has allowed us to completely pay off our conversable notes. We are also in discussion, and very exciting discussion, in regard to our AG019 for T1D program with a number of parties, and we are planning to give our investors an update in the upcoming quarterlies. Furthermore, there are ongoing discussions on our Ultra Car T programs for partnerships, and we will be addressing that. And all of this are the means of non-diluted funding opportunities that we have, along with the cash runway that currently we have up to 2025. And we believe that these non-diluted fundings can extend that cash runway much further. So with that exciting update, I'm going to now turn the call over to our CFO, Harry, to discuss the financial update and our strategy.