Caribou Biosciences, Inc. (CRBU) Earnings Call Transcript

Hopefully, the audio is coming through clear. I'm hosting the Caribou Biosciences team this morning. I've got Tina and Sri. And how are you guys doing? And how is Miami treating you?

Good. It's nice to be in the sunshine. Thank you.

Thanks for having us.

Well, a pleasure. Before we go diving into Q&A, let's have a quick update on where we are on data throughout this year for the pipeline. And then separately, we'll start chatting events, funding strategy, et cetera. But let's sort of get a sense let's reset the table in terms of catalysts for the year.

Sure. As you know, we put out clinical data in November for both vispa-cel and for CB-011. And this year, it's another busy year for Caribou. We're going to have additional follow-up from the vispa-cel data set in 2026. like we had a medical meeting. We initiated dose expansion for CB-011 late last year. We'll have both follow-up from the dose escalation data we put out in November as well as additional data from dose expansion that we just initiated. So look for those in 2026.

Okay. Let's talk a little bit about -- no problem. A little bit of technical staff. Let's talk a little bit about how you think about financing strategy and how that aligns with execution time lines, pivotal design, et cetera, which I guess is a question for you, Tina.

Let me start, yes, with the plans for the pivotal trial. Right now, we are in discussions with the FDA to finalize the design on a Phase III randomized controlled trial with vispa-cel against standard of care in second-line large B-cell lymphoma in patients that aren't eligible for transplant or auto CAR-T cells. And so this allows us to do a randomized controlled trial of about 250 patients with the PFS endpoint. And we are in final discussions around the statistical design of the patient and the control arm. And so that will be coming in the first half of this year. And then I'm going to hand it over to Sri about how that will lead to our financing efforts that will be required to run that trial.

Yes. So as Tina noted, those discussions are ongoing. And really to initiate the pivotal trial, there are 2 things that have to happen. One is conclusion of the discussions with the FDA on the pivotal trial design and then securing sufficient capital to fully fund the study through data readout. Now we don't have to have all that capital on our balance sheet the day we start the study, but we need to have line of sight to that capital to say we're fully funded through data readout. And we expect that after we have concluded our discussions with the FDA, that would enable us to have those discussions with potential investors and funders of the trial. Now we're thinking about funding across multiple different options. Equity capital markets are certainly one source of that, but also looking at potential business development and other, I'd say, more structured types of financings, nondilutive sources of capital as well. We want to be very thoughtful about how we fully fund this program.

Let's talk a little bit about some of those partnership BD nondilutive sort of approaches. How do you think about where we are in terms of market demand for partnerships and assets like this as the company is now on the other side of Pfizer's negotiation right of negotiation. How do we think about where demand is for these assets? And who would be the right partner? Like what profile of the company? I'm not asking you to name a name and restrict everybody.

I think a couple of things. One, the time line for business development is something that not fully within our control, certainly. So as we think about how we fund the clinical trial, certainly, that is an option, but it's not, I'd say, the base case to fund our pivotal trial just because of the timing component of it, it takes significant amount of time from not just Caribou, but also potential partner on the other side. And on types of partners, I'd say there are a couple of different classes. One are groups that are in cell therapy today that believe in the technology have made investment there and understand what we're doing with allogeneic cell therapy and the potential access benefits. And then there are other pharma companies that aren't in the space that we offer significant advantages with vispa-cel that look very different from traditional cell therapy. We've talked to you before about cost of goods being one of those, right? So vispa-cel cost of goods are anticipated to be 96% lower than auto CAR-Ts. That looks more like a drug or something you can build a business around. And there are companies out there that have not gotten into cell therapy out of concerns about the economics there where a drug like vispa-cel could make much more sense given those dynamics.

So let's talk about the economics of this business. I think one of the challenges that cell therapy has faced, both fundamentally in the physical world, but also in sentiment in the minds of investors are concerns around cash generation, margin profile, distribution, timing, combination of issues that all add up to how quickly can this business become an attractive business. Talk about how that has evolved in your conversations and also a little bit where you are in terms of moving out of the most challenging segments of that business model out towards community, out towards outpatient, et cetera.

You want to talk about that part?

Sure. Let me talk about the specific -- the clinical part first. What we've been able to do with an off-the-shelf allo CAR-T cell is get immediately a cell therapy to patients. And this can -- this is needed at academic centers as well as community centers. So we're doing our ANTLER trial at academic centers. So we're enrolling patients that can't wait for auto CAR-T cells or they don't have enough their own T cells to make an autologous product. So the demand is there. There are patients that cannot wait or cannot access auto CAR-T, and we think it's about 75% to 80% of patients. And a lot of those patients are being referred into these academic centers, but then can't wait the 2 to 3 months it requires. And even if those academic centers have something immediately available, what we know from our ANTLER trial and what we hear from other sites that we're talking to is then they'd have something immediately available. That patient wouldn't have to wait those -- or those 4, 8, 12 weeks to get their autologous CAR-T cells. And so once something like this is out in the market, we think there's a lot of demand, both at the academic centers for the patients that are getting referred. But of course, we're also talking with these sophisticated community centers that haven't yet invested in the infrastructure needed for CAR-T cells because of the complexity of the manufacturing of auto. And so when they hear we have something that we can just ship on demand and they can start lymphodepletion and infuse immediately, that's something, as Sri mentioned, they're used to doing. They have infusion centers. They have the hospitals that can care for these patients if they have toxicities. And so a lot of these centers, many of them who are taking up bispecifics already are ready to start thinking about taking on an allogeneic CAR-T cell. And so those are really the 2 sectors clinically that will allow us to get to more patients at the academic centers who already are comfortable with CAR-T cells and these sophisticated community centers that are now getting more and more comfortable with bispecifics, cytokine release syndrome and are ready to have a one-and-done allogeneic CAR-T cell in their armamentarium.

So I want to touch base on the complementary side of that, which is the product side. And where -- what you guys have disclosed and how we should think about building on a donor base, what an appropriate donor base would look like here globally, et cetera, to supply the broad universe of all possible patients. And operationally, what that looks like in terms of accumulating an adequate supply for any hypothetical future launch?

It's a great question. And right now, as we prepare for pivotal trial, we think we need about 10 lots. So 10 different donors, 10 lots to get enough doses to match all of our patients, 250 patients in the trial at 2 or more HLA match with an average match of 7. And we think that this would supply the U.S. population. So we get -- we can get 200 to 300 doses per lot. So this is thousands of doses that will be ready for the pivotal trial. There's only 9,000 probably patients in second-line large B-cell lymphoma. So you can imagine we don't need many more lots for launching into that indication in the U.S. We're already starting to look at HLA diversity and what we would need in the freezer to supply anyone on-demand in other regions. We think it would just take other lots supplementing our diversity in the freezer to go outside of the United States. And we're just starting those efforts, especially as we're starting to think about the global clinical trial, but also, as you mentioned, out into the land of possible. We think with one manufacture -- well, we know with one manufacturing suite in the United States, we can generate 9,000 doses a year. And as I mentioned, that would supply the U.S. for a whole year if we had 100% of patients being treated. So you can imagine we can scale as we would need to, both for the U.S. in different indications as well as ex U.S. with very small footprint.

Just to know that one suite I talked about is only 500 square feet. It's at a U.S. CDMO and the process we have today is commercial ready. So we're going to have batches ready to go when we start the pivotal trial for a process that we believe is already commercial ready.

And let's talk a little bit about moving back to the pivotal trial. Obviously, one of the questions is what's the right site selection. We've seen site selection and investigator experience be really important in terms of execution of trials. This has been -- I think the most extreme example of that was Allogene. I'm dating myself not 4 years ago, with an off-trial administration of drug, which obviously create challenges there. I think we're all around for that, not mean to name check anybody. But obviously, how do you think about site selection U.S. and globally and what the right patient population is to reflect the most commercially viable label and the extent to which that patient population in the pivotal translates into label discussions, which in this case is a little more delicate because you've got a standard of care that exists. This isn't a blue ocean with no approved therapies.

In second-line large B-cell lymphoma, patients who are not eligible for autologous CAR-T cells and are not transplant eligible, there's actually not a standard of care, which is why we are negotiating with the agency a control arm of immunochemotherapy possibilities, things like Pola-BR and other immunochemotherapy. Because these patients can't access the standard of care, as you mentioned, and as I already mentioned when we were talking about access eventually to this drug, even for the clinical trial, our big academic centers have these patients that aren't transplant eligible and can't wait or can't either socially or medically can't wait the months it takes to auto CAR-T. So we will have U.S. academic centers enrolling our pivotal trial, but we also have the opportunity to expand out into these sophisticated centers that are, as I mentioned, doing bispecifics. And so we, as Caribou, will be evaluating each of these sophisticated community sites to make sure they have all of the things required for infusions, toxicity management, getting all the algorithms in place really as a way of showing we can do this on launch as well. So our pivotal trial will be the chance we get to expand out into the community centers, find the physician groups that are willing to have the CAR-T cell teams that will be required with the support of the hospitals behind them to run the trial. And then, of course, clinical trial requires a lot of other infrastructure that's not required for CAR-T cells. So it will be a subset then of what's eventually going to be able of these community centers that could do it in a commercial setting. So that's the United States. When we think globally, the autologous CAR-T ineligible and transplant ineligible population, we need to go to countries that also have an aspect of access challenges. So these have to be countries that have autologous CAR-T cells so that they'll be relevant to the United States and the FDA when those data are reviewed. And so we're looking at countries that have access to auto CAR-T. Therefore, these sites also have experience with cell therapies. They have the systems in place, but they can't get them to all their patients and also are looking for an off-the-shelf readily available CAR-T.

And in the U.S., a lot of the community sites, Tina talked about that we're targeting are administering bispecifics today. So they're equipped to deal with a lot of the toxicity events that arise from this class of therapies.

So you've talked about standard of care and access. And in the real world, the existence of a standard of care and being able to access therapy collapse to the same thing from a patient perspective. If you can't get the care, it's clearly not standard. That hasn't always been the view of the agency. And obviously, decisions around control arms have become contentious, I may make a politic statement. Where -- what is the state of your conversations with the FDA around the extent to which a control arm should be standard of care as defined by best possible data in sort of a photonic sense, capital P or standard of care being determined by what's accessible to patients in the real world financially and based upon distribution systems? Like how does -- how is the agency defined what they call standard of care in the context that will eventually be a registrational review?

It's a great question, though, we're continuing to have those conversations, things like Pola-BR are on the list of things that they're willing to accept as a control arm. I can't necessarily speak to where we're going to end up finally, but we're confident that immunochemotherapy will be the standard general type of therapy in the control arm. And clearly, these patients are auto CAR-T ineligible. So those -- that standard of care will not be required for the control arm.