Precigen, Inc. (PGEN) Earnings Call Transcript

Good afternoon. Thanks for joining us for another session at the 42nd JPMorgan Healthcare Conference. I'm Brian Cheng. I'm one of the senior biotech analysts here. I'm joined by my associate, [ Sean Kim ], who's in the audience. On stage, we have President and CEO. I'll pass the mic to Helen for a short presentation, followed by Q&A. [Operator Instructions] Helen, the stage is yours.

Thank you very much, Brian, and thank you for having us here at JPMorgan this year. First of all, I, obviously, would be making some forward-looking statements. So please make sure that you look at the slides in details. With that, what I would like to start with about Precigen and what a transformative year we are going to have in front of us. I think we are very excited about the strategy of Precigen, which is designed to really address the value over time using 2 major platforms that we have. One is our AdenoVerse platform, and the other one is our UltraCAR-T. Both of them, very well differentiated, and I will go to some of the details. I also would like to mention that on Monday, we had a comprehensive press release that we have put out that addresses all of the major program. And today, I'm going to just highlight some of the programs, but please, I get your attention to read those. Basically, for us, this year is going to be transformative. Why? Because near future, we are moving to BLA filing, and we are really excited and in a very record time. We have taken a program of PRGN-2012 from discovery, all the way to the BLA submission by the second half of this year and for becoming ready for commercialization in 2025. Also, we have established a very diversified clinical pipeline by using the 2 platform that we have both AdenoVerse with, obviously, the potential of PRGN-2012 for commercialization. And right behind that with the AdenoVerse platform is our PRGN-2009 using the same validated platform but in oncology indications that are HPV associated, and we are looking forward to that program as well. And finally, our UltraCAR-T, which is truly a differentiated platform. And especially in the view of the past few months and the challenges that the cell and gene therapy and especially classical CAR Ts and the products have had, it even further have highlighted the advantages of our UltraCAR-T platform, and I will go through that. So with that in mind, let's talk about Precigen and what is the strategy of the Precigen. We basically have advanced our platform in such a way that you can actually, first, educate the immune system from within the patient and also have a platform, and that is our AdenoVerse platform; and secondly, using our UltraCAR-T platform, that now you can ex vivo take the patient T cells and genetically modify them, return them back in order to basically see the enemy from within. And why is these platforms are differentiated? First, I'm going to address our AdenoVerse platform. Our AdenoVerse platform is not like any other AAV platform or [ Y ROR ] platform. What do I mean by that? First of all, it has a much larger capacity than any AAV or lentivirus or retroviruses have. It can go up to 12 kb. So you can imagine a number of genes that can be presented in that. More importantly, this is not a one-shot deal. What you can do with this platform is to keep repeating this. This is not like AAV, you give it once and then you have a neutralizing antibody. Actually, you can keep repeating it, and you keep enhancing the T cells while you are keeping the neutralizing antibodies at bay. Why? Because these are gorilla vectors that humans have not seen them before. So there is no pre-immunity to it, first of all. And because the mechanism of action pushes more toward the T cell, it's quite actually enhanced in that. And our clinical data have clearly have shown that, that you can give it many times. And we have -- some of our patients have received 16, 17 times, and we keep enhancement -- seeing enhancement of T cells. And there is a very durable and strong antigen-specific immune responses that we have shown in our clinical trial. And finally, we have a very high productive manufacturing process, which, by the way, it has been applied for PRGN-2012, which we are doing the commercial manufacturing at our sites. And that also not only brings down the cost but the speed that we are going to have for commercialization. On the side of our UltraCAR-T, we are differentiated in the fact that we are nonviral, and this is not the old-fashioned nonviral platforms with all of the problems that we used to have. We have advanced it to be scalable and commercially viable, which is much safer. And especially with the lentiviruses, what we are seeing right now that even some of them caused the proliferation of the CAR T themselves and becoming malignant. Why? Because this is nonviral. It does not -- the potential of being inserted to the hot spot is much less than lentiviruses. But secondly, we have designed safety switches that you can eliminate these T cells at any given time. And we, of course, have design mechanisms that you can expand and persist these cells directly in the patient. So you do not need to activate and you do not need a centralized manufacturing in advance. Of that, brings down the cost. It gives you the speed, which is overnight at the hospital. So you can imagine how fast we can get to the patient. And finally, the cost. And as a result, of that, we can re-dose those if we need to or change or combine with other UltraCAR-Ts. So let's look at our Precigen pipeline. In this slide, what you see is the depth of our UltraCAR-T programs, which is shown below in light blue the number of programs that we have in the clinic, and I will highlight some of them. But on top, it shows our AdenoVerse platform. And I wanted to mention that our PRGN-2012 is of the highest priority, and we are advancing this as rapidly as possible. With that in mind, let's talk about PRGN-2012 and where we are. PRGN-2012, it targets a recurrent respiratory papillomatosis. Okay. What is RRP, or recurrent respiratory papillomatosis? This is a rare disease which has -- do not have any approved treatment by FDA. The only -- it caused by, first of all, HPV 6 and 11 infection. And the patients that they have this infection, they develop this papilloma or benign tumors directly in the larynx or in the trachea. And the issue there becomes it affects their speech and they can't talk, or they can't breathe. Some of the patients, they develop that from childhood. Some later on in their stage of life through infection. What basically happens here is once these tumors grow, they -- patient has to go for surgery. There's no other options. And these surgeries are recurrent, and it gets worse. Some of our patients, they start with one. And then after a few years, it leads to more and more surgery because a surgery, it leads sometimes to further infection. And then the patient requires even further surgeries. So this is a devastating disease, and you see the picture there with these tumors actually now blocking the trachea and then right on top of the vocal cord. We have had patients that they have had over 300 of surgery over the period of time. And the ones that they participated in our clinical trial, on average have had 6 to 7 surgery and some of them up to 10 surgery in the prior year. So you can imagine, every month to take your child or as an adult going for a surgery in order just to be able to breathe or talk. And what a devastating disease this is. So with that, first of all, I want to really thank our patients or our [ 3 ] patients participating in our clinical trial and also our close interaction with the RRP advocacy group and the leadership. This has been instrumental for development of our PRGN-2012. With that in mind, let's look at the mechanism of what is PRGN-2012. As I mentioned, this is a gorilla adenovirus that has been designed to express the epitopes of HPV 6 and 11 and basically train a T cells -- army T cells from within that can attack the cells that are infected, and especially these cells that they exist in the trachea or in the larynx. The beauty of this treatment is very simple. The patient receive a simple subcu injection like when they receive a flu injection, flu vaccine, right? And then with that, once these gorilla vectors are injected, they train the T cells of your own body to see the epitopes that are causing this infection or the virus that is causing this infection. They expand. They are now a trained army that can attack those cells that are infected and destroy them. And by doing this, you are getting to the root of the problem. The surgery, all it does is like mowing the grass. You cut it. It comes back. However, by using PRGN-2012, we have shown that you train the immune system, and we published this in a science translation this past year, very comprehensive of the mechanism of action and showing that it goes to the root of the problem and basically taking those cells -- infected cells out and therefore, the cells are not growing. So what we have done, and I'm extremely proud of our Precigen team, we have really spearheaded the treatment for the RRP in the field. And the team has done an outstanding job from the start of the discovery program from 2020 to receiving an accelerated BLA by August of 2023. As you can imagine, in the world of drug development, this is an outstanding record. And really, Precigen has become a leader in this field by receiving the first BTD, Breakthrough Designation, in RRP indication. And by receiving the first, also accelerated path for approval from FDA last year. And we are really excited about how fast and agile we have been in this field for our patient, and I'm very proud of our team at the company. So a little bit of a highlight of our data on PRGN-2012. Our clinical data, we have already have in a full Phase I and the expansion of a Phase I, we have demonstrated that we went to the most severe patient population, patients that at least require 3 surgery or more. And also, even though from a perspective of patients, investigators, KOLs, reducing the number of surgery, it's extremely meaningful. We went a step beyond that. And as an end point, we designed our trial in such a way that not only you decrease the number of surgery, but actually you go to as an end point was a complete response, meaning that you do not require any surgery for 12 months. And we follow this patient after treatment with 4 injection -- subcu injection of PRGN-2012. First of all, the route of administration, extremely easy for -- and this is what we are hearing from all of our KOLs, investigators and the patients. Secondly, the safety that we are seeing is only grade 1 and grade 2. Our investigators have associated that very similar to the kind of result that you see after receiving a flu vaccination. There's no device of requirement at this point. And when you look at the severe patient and you see those in that orange bars that some of them in the prior years have had 8 to 10 surgeries, after receiving a course of PRGN-2012, they went to 0, follow-up of 12 months. But on Monday, we actually updated. And we are really excited that these patients now, we have been following them for over 2 years, and they have stayed in a complete response, have not required any surgery. And of course, we will continue to follow up these patients. But at the same token, in the rest of our patients, we also see benefits. 83% of our patients, they reduced their number of surgeries. None of our surgeon -- patients got worse in this trial, and no safety issues. So we have communicated, we are looking forward to showing our full Phase II data by the second quarter of this year. And through the accelerated path that we received from FDA, they have agreed that our single-arm Phase I plus single-arm Phase II, which we enrolled fully last year and the follow-up will be finished and we will be reporting on the second quarter this year, that will serve as our pivotal [ as is ]. And I think that is a great outcome for the patients on RRP with the results we are seeing. And more importantly, in advance of not only the safety but the durability that we are seeing, which is really significant, and our investigators, they love this, so with that, we are on the path to submit our BLA in the second half of this year, and our company is getting ready for commercialization in 2025. And just to show you the potential of the commercial launch for our 2025, obviously, I spoke about the preparation for BLA submission in the second half of this year. And we have been looking at the significant potential market opportunity that this drug product has. And this is, we believe, is under conservative side for the U.S., what we are reporting an ex U.S., and we focus our commercial activity on a very concentrated prescriber base. And finally, under the leadership of Jim Shaffer, the Head of our Commercial now, and we are preparing for the commercial launch for 2025 and this is really a transformational year for our company. We are going from a biotech company that was basically clinical R&D to eventually a commercial company, and that's quite exciting. So with that in mind, we have been assessing and we are looking at the key characteristics that is associated with PRGN-2012. Not only we have been able to reduce number of surgeries, we have eradicated the surgeries required, at least up to 24 months of the follow-up as of now. The durability of this is very appealing to our KOLs and investigators and prescribers that we have talked to. They prefer the route of the administration because it's a simple subcu like a flu vaccine. And finally, the reassuring safety. The comprehensive package that goes, which is also associated with the immunological responses that is in direct parallel footstep with the clinical response, it's very reassuring for this drug product and puts it in a category by itself. So with that, using on the same vein the platform that is now validated with our PRGN-2012, we have applied it to PRGN-2009 to really address the HPV-associated cancers. The mechanism of action here is to target HPV 16 and 18, which is cause of these HPV-associated cancers, such as cervical, head and neck, anal. And the same way, simple subcu administration, training the immune system now against the tumors that express the episodes of HPV 16 and 18 and eradicating those tumor cells. So with that, last year at ASCO, we presented the full Phase I and expansion cohort. And interestingly, when we used our PRGN-2009, even in the patients that they had failed checkpoint inhibitor, we were able to basically achieve 30% objective responses and durable responses. For instance, our complete response well over a year. With that clinical data, we have moved now. Not only we are in Phase II in head and neck, but also we received the IND for Phase II/Phase III pivotal in cervical cancer. And we are very shortly enrolling to that, and we are very excited about this. And finally, a few words about our UltraCAR-T platform. That is, basically, the way it's designed is to allow nonviral, basically electroporated T cells that express the CAR, the membrane-bound IL-15, which allows for activation persistence of these cells directly in a patient, and a safety switch, which allows for elimination of these cells in case of any toxicity under a same promoter that you will then achieve a homogeneity of the drug product. We have designed this in such a way to answer majority and, I would say, the shortcomings of classical CAR Ts as well as off-the-shelf, as you see in this table. We now can basically do a nonviral using our UltraPorator, 4 billion T cells transfected under 12 minutes. This allows us scalability for commercialization. We have achieved overnight manufacturing at the site of the hospitals without Precigen employees being there. And now we are in number of the sites, such as Mayo Clinic, Moffitt, Fred Hutch, University of Washington and soon to be NIH added. The safety has been very favorable. We have not had any DLTs. No neurotoxicities. We have shown in vivo persistence and expansion and much less cost of manufacturing time to the patient and the safety. With that, the mechanism of action, what you see in this slide, this is exactly as it takes place in the hospital. And currently, our patients are going, and we have treated upwards of 70 patients in our trials. So this is not our imagination. This is not what we hope to achieve. This is what is happening currently at the hospitals, and patients are being treated. And we have data -- clinical data that, for instance, on our AML studies at ASH was presented in the patients that they are basically [ hospice bound ]. We had 27% objective responses. We are moving that to Phase Ib. Through that, and as we guided, we will be reporting on data on that by the end of this year and speaking to FDA. All of the other CAR Ts are advancing rapidly, and we are really excited. Today, I also want to introduce one new CAR T member, our PRGN-3008, which targets CD19 but also have the capability of downregulating the PD-1. And we believe -- in the next slide, I'm going to show you some preclinical data -- that, first of all, the design of this, it has all the bells and whistles of our UltraCAR-T: safety switch, in this case, of toxicity; membrane bound IL-15 for expansion, so you don't need to activate or manufacture billions of this before and keep it for weeks in the centralized manufacturing facility, it's done at the hospital overnight; and with the ability of downregulating PD-1, which then you don't need to combine with checkpoint inhibitors for reducing the toxicity and the cost. But what I'd like you to take a look at is on the right-hand side. You see the control animals. All those blue and yellow greens that you see, that is a tumor. On a conventional CAR T, you see there is a benefit but not that much. There are a few animals that they are tumor free. But rest of them, they continue to develop the tumors. But I'd like you to take a look at that UltraCAR-T next generation. And now you see every single one of those animals have cleared the tumor. This is the power of UltraCAR-T. Even though we believe in the oncology indication, we might not be the first in the market. We believe we can be the best in the market. But more importantly, we are preparing our CAR T also to enter to Phase I in immune diseases and autoimmunity. And in that setting, we believe we can be first and best in class. Why we are saying that? Simple. For chronic diseases, the safety bar is much higher than oncology indications. You have to ensure that these patients that they live long time. You are not exposing them to the safety issues, that the Stage 4 perhaps is tolerable for a cancer patient that doesn't have any other option. Number two, with the chronic diseases, you generally have to re-dose. The manufacturing of all the CAR Ts that are going in that direction would not allow for that. We believe based on the safety switch that we have, based on the preclinical data that we have put forward, based on the low cost of the manufacturing, a fast overnight manufacturing, this makes the best candidate to enter to the clinic for autoimmune diseases. And we are pushing forward by the end of the year toward this. So with that, this is the reason of what we think the future of cell and gene therapy and medicine should be as far as CAR Ts are concerned. The library of the CARs and plasmid that exists in hospitals as the patient walked in the oncologies, they ask for a specific CAR to be basically manufacture overnight. The next day, the patient received their own autologous T cells, much lower cost, faster, safer. And if they need to be re-dosed, they can do that. If it needs to be combined with another UltraCAR-T, they can do that because the costs are short and low and then you can move on. So with that, I thank everyone for listening to this presentation and look forward to the questions.

Great. Thanks, Helen, for the presentation. Let's kick off with the Q&A. [Operator Instructions] So I want to start off with PRGN-2012 in RRP. This is a great -- this is going to be a very transitional -- transformational year for you given that you're going to have pivotal data. This year, you're going to start prepping for BLA. At the same time, you're also starting to prep for the launch as well, right? So maybe just one is on your preparation currently. As you think about the commercial infrastructure needed to launch this product, how big of a sales force do you need to launch within the U.S.? And also, as we think about -- just from a modeling perspective, right, how should we think about the launch trajectory based on what you know and also what you're hearing from KOLs?

Absolutely. Excellent question. First of all, for our preparations based on we have already -- Jim Shaffer, who's in the audience, has joined us in 2023. We're really making the organization prepared for this. And we have started the studies and research marketing studies and everything else, which in the very near future, we will speak more about that. But what we have seen is that, obviously, the primary, there are close to thousands of ENT. But really, the specialists that they treat these patients, they are close to 500, basically, a specialist for the larynx and trachea. And our focus is going to be on these physicians. And because we can narrow this down, we believe that we can have a very effective commercial force that can be interacting with these physicians and especially in the centers of excellence and also in their practices that can position the PRGN-2012. Obviously, all of the commercial units are being built as we speak, and there are -- activities are ongoing on the marketing side, payer side, medical affairs. And we are really excited about this that we will be prepared for a launch for 2025.

So just to piggyback on your comment related to the 500. So I mean the way how I think about it is more like a reverse pyramid, right? So the Tier 1, if I may start labeling things and putting them in buckets, so Tier 1 is the 500 initial set of doctors and then potentially can expand to the thousands of ENT doctors, right? So how big of a sales force would you need to kind of make sure that you penetrate well into the initial 500 doctors who are your initial targets? And where are you also onboarding these sales reps and the rest of the sales infrastructure?

Right. I think as you said, this is an inverse pyramid, meaning from thousands to 500 and focusing on that 500. And the way we assume, currently, we -- obviously, we are looking at details and how many sales rep is needed, and we will deploy the right amount of sales rep that to ensure a very successful launch. And are we talking about that -- at the moment, we are not looking at more than 20. But this is -- we are narrowing further, and Jim will be speaking to that in a very near future with detailed, actually, launch plans and preparation. But it will be a very focused sales group because actually, the number of the physicians that we have to target is limited to 500 and centers of excellence that they are treating majority of these patients. And we have spoken to KOLs. A number of them, they have -- in their practices or in the hospitals that they are practicing, they are treating 50, 70, 80 in these settings. So clearly, we can focus on those and start to launch very, very rapidly.

And as we think about -- of course, as a component of efficacy in the ongoing pivotal Phase II, and that's certainly a part that we all have to care about, but when we think about the rest of the BLA package, right, what additional information outside of -- I think earlier in your prepared remarks, you said that there will be the Phase I -- the single-arm Phase I and the single-arm Phase II that will be in the data package, right? What additional information do you think that will be -- that we should also think of when you're starting to prepare the data package?

Absolutely. For BLA, for any BLA, obviously, there is nonclinical, clinical, CMC package that has to be submitted. And of course, one of the things that we have been very good at, for instance, on the clinical side, and that's why FDA has -- our Phase I clinical, basically, design is exactly the same as Phase II. So that is the reason that in the original guidance from FDA have said that we can use and combine these 2 together and have given even us the confirmatory trial can be exactly the same way as we have executed. So those packages are being -- getting ready. And as you know, as part of our Accelerated Approval path, we can go for a rolling BLA, and we will be taking advantage of that, submitting these different units. And then, of course, our CMC, which, again, has been very similar to the material -- or commercial CMC to the material that we have already generated for a pivotal Phase I, Phase II and those packages will be submitted along the line for that. So those are the components of the -- really major components into a BLA, and we are in the process of actually putting all of that together. And then as we mentioned, the guide would be for second half of this year for full submission.

Any questions from the audience? So on capacity, in terms of at launch, how should we think about that? And where does it ramp up to at, let's say, a year to 2 years down the line?

Excellent question. What we -- originally, as we were going through our pivotal, we were preparing our own manufacturing facility on site. By the way, all of our GMP material that was used in Phase I, Phase II pivotal was already prepared at our own manufacturing site. So that's very important. And of course, our manufacturing team continues to do that and prepare for the commercial launch. And we are confident because of also the cell lines that they produce this viral vector, which are very efficient, they have a high efficiency, we believe we will be in a very good position to have material -- enough material for basically start enrollment of the commercial and treating patients, obviously, after receiving in 2025 the approval from FDA. It will be a very rapid, I think, movement from after approval to supplying the material to the patients.