Hello, and welcome to Adaptimmune's call to discuss their recent news. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. With that, I will turn it over to Juli Miller.
Good morning, and welcome to Adaptimmune's conference call to discuss our clinical collaboration with Galapagos. I would ask you to review the full text of our forward-looking statements from yesterday's press release. We anticipate making projections during this call, and actual results could differ materially due to several factors, including those outlined in our latest filings with the SEC. Adrian Rawcliffe, our Chief Executive Officer, is here with me for the prepared portion of the call, and other members of our management team will be available for Q&A. With that, I'll turn the call over to Adrian Rawcliffe. Ad?
Thanks, Juli, and thanks, everyone, for joining us. I'm absolutely thrilled to announce the collaboration with Galapagos. I want to tell you a little bit about the, about the deal, and then we'll open up for questions. So data from our SURPASS trial in head and neck cancer, as you know, has been incredibly promising. We have now four out of five patients treated with RECIST responses, and actually all of the patients that we've treated had substantial reductions in their target lesions. So this is clearly a very active agent in head and neck cancer.
But these are patients with advanced head and neck cancer who tend to progress very rapidly, and the opportunity to combine this product with its demonstrated activity and significant activity with the Galapagos manufacturing platform, I think represents a real synergy and, and importantly, provides the opportunity we've been seeking to transform the experience of head and neck cancer patients. So we've completed initial preclinical studies, and we've shown that uza-cel can be produced on the Galapagos platform, and we are now set to get the initial proof of concept clinical trial in head and neck cancer up and running as quickly as possible.
The rest of the deal works like this: We will get initial funding of $100 million, of which $70 million is the upfront payment and $30 million is the R&D funding, half of which we will receive now and half of which we'll receive later. Once the proof of concept in head and neck cancer is established on Galapagos's platform, they can then option all indications addressable by uza-cel with option fees that are up to another $100 million. We'll get additional development and commercial milestones, that's a little less than $500 million, and obviously tiered royalties on sales. So, I mean, we're very excited to embark on this collaboration with our new partner, Galapagos. We see this as a natural and significant opportunity for both companies, given our respective strategies.
Going forward, Adaptimmune is gonna focus on near and mid-term revenue-generating assets, starting with our sarcoma franchise. The PDUFA date for afami-cel is rapidly approaching. We'll continue that franchise with lete-cel, and then, of course, we have uza-cel in ovarian cancer in a late-phase trial, SURPASS-3, which will continue as planned and where we have retained rights to develop and commercialize uza-cel. We will begin to wind down our SURPASS phase I cohorts in head and neck and bladder cancer, and we'll continue to advance the rest of our pipeline, the head and neck proof of concept trial with our new partner, and the preclinical programs targeting PRAME and CD70 and the rest of the platform research. So with that, I'm going to turn it over to the operator for questions. Operator?
Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We'll pause for a moment as callers join the queue. The first question comes from Marc Frahm of TD Cowen. Please go ahead.
Hi, this is Ernie Rodriguez for Marc. Congrats on completing the deal. Just a couple of questions from us. Could you explain the rationale behind, like, why head and neck cancer as the initial indication among all the other indications of interest? And then, in terms of the upfront capital, like, what does that mean for the company, given the upcoming potential commercial launch of afami-cel or is it earmarked for that, or is the company more investing in the preclinical assets that you just mentioned? A little bit more color on that. Thanks.
Thanks, Ernie. So I'm gonna ask Elliot to talk about head and neck and the selection of head and neck as the initial proof of concept study. But before we do that, I'm just gonna cover your second question about the financing. Yeah, so I think obviously this financing is important to us as we think about the impending launch of afami-cel.
I wanna make the point, though, that interestingly, since the beginning of this year, we've secured access to a little over $250 million of capital in the first five months of this year, in order to support the late-stage development and commercialization of what I think might be the first three engineered T-cell therapies for solid tumors on the market. So and that very little of that capital that we've secured was diluted capital. So we used the ATM in the first quarter to bring an important investor into the stock, where it generated $30 million. We then subsequently secured a loan facility with Hercules for up to $125 million over the period where we will be developing and commercializing our sarcoma franchise.
We've just now secured a hundred million of capital over the next couple of years, most of which is in the very short term, and most of which can be deployed towards our late-stage pipeline. So I think with that, we feel quite comfortable with the capitalization of the company in order to be able to launch afami-cel, develop lete-cel, and develop uza-cel in ovarian cancer towards the market, and that's where the majority of that capital will be deployed. Elliot, do you want to talk about head and neck cancer and those patients?
Yeah, sure. Thank you. So the choice of head and neck cancer as an initial indication to study with this new collaborative platform I think makes sense from both our side and from the Galapagos side. The clinical data in a small number of patients, albeit five patients, is really quite remarkable with a response rate of 80%, that's confirmed persistent responses. And the last patient, the fifth patient, probably had the most profound response, it just was very short-lived. So I think that we wanna set this program up for success.
And in addition to that, there's been a degree of, I'll call it, you know, a degree of frustration with the SURPASS program in head and neck patients, because we've identified patients and a good number of them have, between when they've been identified and when they get dosed, end up being too sick to receive the product. And there are other reasons why there have been challenges, but that being one of them, the Galapagos Cocoon system allows for a seven-day time period between leukapheresis and dosing, which we think will increase the number of patients that we can treat, number one, and also treat them when they're healthier and more apt to respond.
I think those are some of the highlights as to why head and neck cancer was chosen as the first indication.
Thank you. That was very helpful. Congrats again on the deal.
Thanks, Elliot.
The next question comes from Michael Schmidt of Guggenheim. Please go ahead.
Hey, guys, this is Rosy on for Michael. Congrats on the deal. Thanks for taking my questions. Maybe just two for me. I guess, what are the opt-in mechanics for Galapagos to obtain full rights in head and neck? I guess, is this something you expect after the completion of the proof-of-concept study, or could it occur at a sooner or, or at an interim analysis? And then the second question would be, can you provide some more color on the planned proof-of-concept trial on head and neck, and will it be similar to the ongoing label SURPASS-3 study in ovarian in terms of size and design?
I'm gonna ask Helen Tayton-Martin, our Chief Business and Strategy Officer, who is the architect of this transaction from our side, to comment on the opt-in mechanics and the what little we've said about the design of the proof of concept are. Helen?
Yeah, thanks, Adrian, and thanks for the question. So the study is basically the option will occur at Galapagos's election. But effectively, what we're assuming is it'll be based on a clinical data package that will come from the proof of concept trial in those head and neck cancer patients. So, you know, we've discussed with them a typical pilot study design, not dissimilar to the designs we've used elsewhere in our SURPASS program, to evaluate the therapy in head and neck cancer patients. So, there'll be a data package which can trigger their option exercise, which could be for head and neck only, or for another indication or for all indications. So it's really that data package triggers option exercise decisions all around.
On your other question... So yeah, I think I've talked to the other piece of the question, which we haven't disclosed the actual study design. It will be a pilot proof of concept study, and we expect to talk more about that in collaboration with Galapagos at probably a forthcoming conference, to share more on the design.
Great. Thank you.
The next question comes from Tony Butler of Rodman & Renshaw. Please go ahead.
Yes, thanks. Good morning, Adrian.
Good morning.
What or maybe Helen can address this as well, but what is Galapagos' overall commitment to cell therapy, at least from your perspective today? And do they have sufficient capacity, or can they create in very short order sufficient capacity to address, I think part of the previous question, you know, to expand potentially into other indications, et cetera? Thank you.
Yeah. So maybe I'll touch on that. I think it's pretty clear from the statements that Galapagos has made, but more important than the statements they've made, the investments that they've made over the past couple of years, that they see the opportunity to create a cell therapy franchise that is a significant opportunity for them. And they've gone about putting in place the platform to be able to do that. They're betting on a distributed manufacturing platform that. And they've been working on that in the hem- onc space for some time, at this point in time. You look back at the comments they've made, it's clear that they have a significant strategic intent in the cell therapy space.
Into that fits, I think, quite nicely, uza-cel with its demonstrated activity in a solid tumor indication. So this, I think, is the opportunity for Galapagos to use their platform and leverage that into the solid tumor space. So their commitment seems very significant, and obviously, that's important to us as a company who is absolutely committed to cell therapies in the solid tumor space.
Thank you, Adrian. Appreciate it.
Cheers. Tony.
The next question comes from Jonathan Chang of Leerink Partners. Please go ahead.
Hi, guys. Good morning. Thanks for taking my questions, and congrats on the deal. First question: Can you discuss the advantages of the Galapagos decentralized manufacturing platform, and how that might translate into an improved clinical profile? And then second question: How should we be thinking about timelines of the head and neck proof of concept study? Thank you.
Okay. So I'm going to ask John to talk to the Galapagos manufacturing platform and the opportunities that that represents to test this sort of series of novel approaches to manufacturing. And then I'll come back at the end and talk about the timelines for the proof of concept study. John?
Yep. Thanks, Ad. Hi, Jonathan. I mean, you, you're right. I think there's a couple elements to decentralized manufacturing to consider, one being the, the product itself and the, the concept of fresh in, fresh out material, perhaps a lower dose, faster turnaround time. That is a different product, and I think we've seen some elements that, that might, might indicate that that could, be one of the things that helps in terms of the clinical outcome. But that's obviously the intent of the proof of concept, is to be able to, to assess that. From an operational perspective, the idea of decentralized manufacturing, just to be clear, there's a lot of elements that Galapagos have innovated around this, and they, of course, can speak to their system better than we can.
But, it's not just manufacturing closer to the patient to remove logistical hurdles. It's some proprietary QC methods which speed things up. It is the end-to-end closed nature of the system and they excel at workflow management that they procured as well. So all of those, I think, contribute to an operational efficiency, perhaps a reduced cost, perhaps greater access. So there's two things I think, that are very interesting to test, one being the product side and the other being the operational execution of this innovative model.
With respect to the head and neck, the timelines for head and neck data, we anticipate data no earlier than 2027.
Got it. Thanks for taking the questions.
The next question comes from Graig Suvannavejh of Mizuho. Please go ahead.
Yeah, good morning. Thanks for taking my questions, and congratulations on the deal. I've actually got two. First is, maybe just if you could provide a little bit color on how the collaboration came about. Was this you actively looking to find a partner to further develop uza-cel? And how did you come to selecting Galapagos in particular? So just some color there, if you could. And then my second question, just with respect to the financing that you were able to gain out of this, could you maybe provide an updated view on your current runway?
Okay, so I will take a high-level stab at the first piece of that first question, and I'll cover the second, and then I'll ask Helen to talk about how the negotiations came to be with Galapagos. So, the high level, you know, I think we've been really clear, well, for as long as I've been at the company, so that's nine years. That if you want to maximize the value of the pipeline and the platforms that we have, both from a development perspective, from maximizing the platform, the utility perspective, and from a geographic perspective, we are going to need partnerships to be able to do that. And that's how we set about building the company, as one, we've actively embraced the ideas of partnerships.
There's also a piece to that that says that, you know, we've adopted a mixed model of dilutive and non-dilutive financing for the company, over the past many, many years as well. So this deal fits very nicely into that sort of that strategic intent to maximize the value of this on a global basis in as many indications as possible and leveraging the technology platforms. So Helen will talk about how the collaboration came to be. I'll just touch now on the financing. As I mentioned earlier, this is the latest step in our plan to catalyze the company effectively for the launch of our sarcoma franchise and the development of our late-stage pipeline.
We've this is, this piece gives us access to, you know, a total over the three things we've done this year of a little over $250 million. And we now feel quite comfortable and confident in the balance sheet to be able to move forward into the sarcoma franchise. With respect to specifically to guidance, we will update guidance at the next Q call in line with historic practice. Helen, do you want to talk about the collaboration with Galapagos specifically?
Sure. Thanks. Thanks, Ad. Yeah, no, no, and as Adrian has said, you know, we constantly are engaged with partnering conversations, as you would imagine, as you would expect us to be, that we look at in the context of where the company is and how it is progressing and developing. And we've obviously been talking to Galapagos for quite some time, amongst other companies. And I think the opportunity to actually be flexible and innovative and actually test this pre-clinically, both companies were keen to do that initially. You know, to sort of make sure that there was, you know, an understanding and a potential path forward here. And I think that obviously was the first piece of work that we did.
And then, we continued to sort of talk through what, what's the right option, what the right deal could look like. And I think where we landed was something that worked very well for us, to maximize the opportunity, with the uza-cel asset, whilst we continued to prosecute the late stage, but near-term commercial pipeline. So I think basically, it became a win-win. Other conversations were also going on, in and around it. These, as you can imagine, over a long period of time, but this basically emerged as a solid and exciting path forward for the uza-cel asset, in particular in head and neck cancer, to explore it, given Elliot's comments earlier on the opportunity, here that we saw jointly.
Thanks, Helen. If I could just ask one more follow-up, just, on your plans to further develop uza-cel in ovarian cancer. Could you just remind us where we are with that and what the next, perhaps, data set, when that might come? Thanks.
Yeah, so I'll just quickly cover that. SURPASS-3 trial is recruiting in platinum-resistant ovarian cancer. Because it has the potential to be a registrational trial, we won't be putting out data, although there are interim data reads for futility endpoints as we go through. We won't be putting out interim data until we've enrolled the last patient. We anticipate that happening in 2025, with a full data readout from that trial in 2026.
Thanks so much, Adrian.
Thanks, Graig. Cheers. Bye.
The next question comes from Yanan Zhu of Wells Fargo. Please go ahead.
Hi, thanks for taking our question. This is Kuan Ang for Yanan. Two quick questions from us. First, is ovarian cancer or urothelial cancer subject to future opt-in from Galapagos? And second, you mentioned that you are unwinding down SURPASS. Does that mean the company is no longer pursue urothelial cancer? Thank you.
Sorry. The answer to the first question is yes, all indications are potentially subject to opt-in. The answer to the second question is, our focus going forward is gonna be on the head and neck study in collaboration with Galapagos, moving forward in ovarian cancer in the SURPASS-3 trial, and then obviously on our sarcoma franchise. So in the short term, we don't have plans to further develop in bladder cancer.
Got it. Thank you for the comment.
The next question comes from George Farmer of Scotiabank. Please go ahead.
Hi, good morning. Thanks for taking my question. A couple from me. Regarding the current SURPASS study, will you continue enrolling head and neck patients with Adaptimmune manufactured material in that study, at least for the time being, until you get the Galapagos material through the FDA and into a new protocol? Number one. And number two, can you address any potential risks that you see in transferring over the process to Galapagos at scale? Is there anything that we should be worried about?
So I'm going to ask, Elliot, to talk about what we're doing with the SURPASS trial. And then I'm going to ask, John, to talk about the transfer of the uza-cel to put it onto Galapagos's manufacturing process. Elliot, do you want, do you want to talk first?
Yeah, sure. With respect to the wind down of the SURPASS trial, I mean, that will, that will occur over, you know, the, the ensuing months. Typically, unless there's a major safety concern, we try not to abruptly stop studies and allow patients who are in the queue to sort of have an opportunity to proceed through. So I think it's possible that we will dose a handful of additional patients with head and neck cancer, small numbers, between now and the wrap-up of the SURPASS trial. But I don't think that we intend to continue it, as you suggested, sort of up to and until the start of the proof of concept trial with Galapagos. There's likely to be a break in between there.
John?
Yeah, and Yep, so this is John. So on the manufacturing side, so as we mentioned earlier, there was a proof of concept done before this to produce uza-cel on the manufacturing platform that Galapagos did, and we were pleased with the outcomes of that in terms of producing a uza-cel product that reflects our current specifications in particular. You know, this is an innovative model. I'll point you to Galapagos to talk more about their success there, but they have used this distributed model in phase one trials in Europe. They've announced recently several investments in the States as they begin to test this model. But, you know, it is a new model. It's an innovative model.
It's innovative, not just in the manufacturing process itself, but innovative QC methods, you know, the fresh in, the fresh out, this distributed model. They're all different things that I think we're excited to test operationally and see how that goes.
Great. Thanks very much.
Thanks, George.
The next question comes from Arthur He of H.C. Wainwright. Please go ahead.
Hey, good morning, guys, and congrats on the, on the deal. I just have two quick one. First one, regarding the deal, could you give us more color on the, the option exercise regarding the different indication? What if the, how much it could be for just for the head and neck indication? And also for the milestone payment-wise, is there a flat rate or regardless of number of indications they get it taking?
Helen, do you want to talk to that?
Sure. Thanks, Adrian. So the option exercise, we haven't disclosed the breakdown of the payments, whether it's head and neck alone, whether it's head and neck or and another indication or all indications. But all indications is $100 million, so there will probably be more color on the option exercise fee in the fullness of time, but that's not, we haven't disclosed that as of today. I'm sorry, your the second part of your question was in relation to the milestones?
Yes. Yes. So it's just the milestone, the $465 million is fixed, or it could change, depends on how many indications they get taking?
So it will vary according to the number of indications that are approved and obviously locations of where those are approved. And again, I think, you know, that isn't disclosed at this point in time, but will probably become clear, obviously, once we get to that stage.
Awesome. Thanks, Helen, for the color. My second question is regarding the manufacture-wise. So given this is a decentralized manufacturing platform, how many sites do you think it's a good number in the trial to demonstrate that the manufacturing platform, the reliability and the overall quality?
So, as I said earlier, actually, on the call, we haven't yet disclosed the study design and the full plan that we anticipate. We would actually put out probably a, you know, a trial in progress poster at a-
Okay, so sounds good. Thanks. Thanks for taking my question.
The next question comes from Peter Lawson of Barclays. Please go ahead.
Hi, good morning. This is Alex, on for Peter. Thanks for taking-
Yeah.
- our questions. Just, yeah, just a quick clarification. So can you say how many indications are part of the opt-in here for Galapagos, potentially, in total?
Yeah, it could be all indications.
Okay. And is urothelial cancer part of that, or is that being, or not?
It absolutely could be, yes.
Okay, great. And then just with the ovarian cancer indication, I know you retained some rights to develop that on your own, but can you give us any additional insights into what the opt-in from Galapagos could be around that? If that's based on the SURPASS-3 study, or is that just purely based on their own proof of concept studies? Thank you.
Sorry, could you repeat that question?
Yes, sure. For the ovarian indication.
Uh-huh.
I understand that's part of the potential opt-in for them.
Yeah.
Is that based purely on their proof of concept study, or is that based on outcomes of the SURPASS-3 study?
So the way it works, I think there might be some confusion about this more generally. So let's just be very clear. We'll do the proof of concept study in collaboration with Galapagos in head and neck cancer. At the end of that collaboration, that study, they can opt in. The indications which they opt in are not named. They can opt in for one, two, or all indications. And if they opt in for all indications, then that's all indications. But it would be on the basis of the data that they have on their platform, and it would give them an option to develop on their platform.
We obviously, at that point in time, will be many, many, many years ahead. In fact, you know, probably realistically, uza-cel could be on the market by the time that we're thinking about ovarian cancer on their platform. So that's how that will work. We get to develop uza-cel in ovarian on our platform. They have an option after head and neck to opt in for indications, including for all indications, if they'd like.
Great.
Does that make sense?
Thank you. Makes sense.
Yeah. Cool. Thank you.
This concludes the question and answer session. I would like to turn the conference back over to Adrian Rawcliffe for any closing remarks.
Thanks, and thanks everybody for joining us. Absolutely delighted to be in collaboration with Galapagos, and now the attention of the company turns to executing on that collaboration and also moving forward with our late-stage pipeline, starting with afami-cel in synovial sarcoma, with our PDUFA date coming up. So if anybody has any other questions or would like to discuss further, please reach out to Juli. Otherwise, have a great day.
This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.