Hey, great. Let's get started. My name is Yana Zhu. I'm one of the analysts here at Wells Fargo. It's my great pleasure to introduce management team from Adaptimmune. With us here for the fireside chat session are Adrian Rawcliffe, CEO of the company, and Elliot Norry, Chief Medical Officer of the company. Thank you for being with us.
Thank you.
Thank you.
Great. So Adaptimmune has been a pioneer in T-cell therapy in for solid tumors, and following recent FDA approval of your first product, the company has transformed into a commercial stage company. So congrats on the progress and achievement. Can you give us an overview of the Adaptimmune story and where you think the company is headed?
Adaptimmune was founded 16 years ago, based on the premise that cell therapy would be transformative for cancer, and that CAR T therapies would be inadequate to deal with solid tumors for a whole variety of reasons, and that engineered TCR therapies, because they can address intracellular targets and elicit a more natural immune response against cancer, would be transformative for the space. We also understood at the time that if you're gonna do this, this is not a technology play, this is a product play, and you need to put in place a company that can actually have the capabilities to discover, develop, and deliver these cell therapies. The most important piece differentiating that in the cell therapy space was the delivery, and that's about manufacturing and CMC.
And so we've been investing in the capabilities needed to be a fully integrated cell therapy company, soup to nuts, research to commercial, over the last decade. And that's resulted in the pipeline we have now, which targets, I think, some of the biggest targets in the solid tumor space, and the first product targeting MAGE-A4 T-cell approved by the FDA on August 1st, and the first engineered cell therapy for a solid tumor indication, the start of many and the foundation of our sarcoma franchise, which is the opportunity to treat a devastating set of soft tissue sarcomas with transformative therapy where there is nothing else. And for us to really carve out a niche for ourselves in that space and to own that sarcoma space, cell therapy for sarcomas. So that's the future of the company.
Got it. Got it. Very helpful. And, let's talk about the launch. Any early insights or takeaways from the launch? What is the level of interest from physicians and patients? And any diagnostic testing scheduled, and when might be the first apheresis?
So I think it's difficult to overstate the level of anticipation within the synovial sarcoma community for Tecelra. There's been nothing in this space for a decade, and these sarcoma physicians are faced with a largely young population, average age of diagnosis is in your early 30's, for whom they have limited solutions and nothing that is actually, once you have metastatic disease, providing a long-term benefit, and so into that comes not just a new therapy, first one in over a decade, but this cutting-edge cell therapy, which this community has been working with us for the last 5 or 6 years to put through late stage clinical trials, so the places that we're launching in are largely the treatment centers that we have conducted clinical trials in.
They are familiar with Tecelra, they are familiar with cell therapy more generally, and they have eagerly anticipated this for a long time. So, we plan on launching in 6 to 10 treatment centers, growing that to 30 over time. And, what we've said about the treatment, the testing, which is critical, and then the apheresis and treatment to the patients, is that we will update on the number of patients that we have apheresed as a precursor to actually having sales, which will ultimately be on infusion. And that we will start doing that as soon as we start our regular updates later on. And we've given guidance that you should anticipate about a 3-month window from approval to the first patients getting treated.
That will shorten over time, but initially, that's what we anticipate, and so therefore, we could anticipate first patient's infusion in Q4 this year.
Got it. Thanks for that color. Can you then just honing in on that timeline, let's talk about the patient journey. How long, you know, from the patient expressing interest and then, you know, committing to getting treated, and then from that point to getting infused? So what are the things that happen during that period?
So, Elliot, do you want to talk about the patient journey? Well, the testing, et cetera?
Yeah, sure. So, I mean, the first thing that will happen for patients once they've been identified as a potential candidate for treatment with Tecelra is that they'll have testing for MAGE-A4 and HLA type. We've arranged for sponsor testing for both of those. And if they're done simultaneously, you can anticipate it taking, you know, let's say 2 weeks from the time that the tests are sent to have them back, to bring the patient back to be evaluated for treatment. If they're at one of the treatment centers, one of the ATCs, then they could very quickly be scheduled for leukapheresis once insurance issues are cleared.
Once patients are scheduled for leukapheresis, from the time that we receive the product to the time that it gets back to the treatment centers, it generally 6 to 8 weeks. The manufacturing process is shorter than that, but there's release testing, and conservatively, it should not take more than 6 to 8 weeks, and at that juncture, patients can be reinfused after they receive their lymphodepleting chemotherapy. So really, I think that's the essence of the patient journey. The clinical trial components have been cut out, but there's the ordering process is up and running, so any authorized center can select a leukapheresis date right from the ordering system.
There's an interaction that will take place between the company and the ordering physician and their team around ensuring that there's proper payment coverage in place, so that essentially describes the journey for a patient.
Got it. Got it. I see. So I heard you. You mentioned that you will arrange and sponsor the testing. I think you have HLA testing and MAGE-A4, right?
Correct.
For all the patients. Some of them will, of course, test negative for either of those antigens, right?
Right.
So, but is that a significant spend to do those testing's?
You know, the cost of those, and you can speak to this also, Ad, but the cost of those tests is in the low hundreds of dollars, each of them. So, it's in the grand scheme of the cost of delivering the product and the reimbursement associated. It's really trivial.
Right. Got it.
To sort of underline that, you can do these tests in parallel, and obviously, given that we've just launched and so this is available, that will happen. However, what we've observed in the clinical trials is that, patients coming into the clinical trials had often been previously tested for HLA.
Mm.
And that manifested in higher than anticipated numbers of positive HLA patients, 'cause only the ones that were positive for HLA were sent through to the trials. And so, actually, the synovial sarcoma docs in the centers where we're going to be have already been testing for HLA routinely, because after 1st-line chemotherapy, the cellular therapies in those centers in clinical trials were the sort of de facto standard of care for 2nd, 3rd, 4th-line patients. And so HLA testing, we anticipate over time, will happen quite early in the patient's treatment journey. MAGE-A4 or potentially when lete-cel on the market NY-ESO testing could also happen before the patient is then eligible for therapy. So you could cut out that period of testing, previously.
The other piece is the payer journey, initially, and I think the previous company has talked about, you know, initially that can take quite a long time for the first few patients and the first few payers, and then what happens is the payers put in place policies that cover this, and the whole process gets sped up to a few days, a week or so.
I want to emphasize how critical this sponsored testing is to the referral network that we intend to or are creating. It makes it possible for a patient, regardless of where they are, to be tested for HLA and MAGE-A4 without having to travel to a treatment center. In establishing a network of sarcoma centers of excellence, we really will be able to allow them to test their patients and only send them on the journey to get enrolled in a cell therapy treatment if they have the right markers.
We're also actively, you know, working with NCCN to update the guidelines so that patients' testing is immediately sort of understood and also to help with from a payment standpoint, so that we really start to streamline patients from anywhere in the United States at a sarcoma center of excellence to a treatment center in an effective way for both the patients and for us.
Got it. Yeah, very helpful. Maybe, on the payer side, maybe one follow-up question. What's the payer's reaction to the $727,000 list price of Tecelra?
So, we've, I think, had relatively positive reaction to the treatment as a whole. Clearly, we've been working with the payers, talking about the benefits of the therapy and the opportunity therapy represents for this relatively discrete population. And I think that's the biggest thing to think about from the payer's perspective, is that, you know, whilst the therapy on an individual patient basis the cost is obviously significant, our cost forms part of an overall cost of treatment that I think, based on the benefit, is entirely justified. But at the same time, it only applies to a very small number of covered lives because of the rarity of the disease. And so we've had good responses so far, and we look forward to getting reimbursement for the patients as they flow through.
Got it. Got it. Is there going to be a difference in the reimbursement dynamic for the commercial and Medicare patient?
There will be a slight difference in the dynamic, but we anticipate coverage of both commercial and Medicare patients. And we will obviously be applying for an NTAP payment in due course, that won't come through till next year for the Medicare side of things, which will also help the overall reimbursement situation and the ability of the sites to get paid.
Got it. Got it. What's the patient, you know, given the age of the patient, are relatively younger, right?
Yes.
What's the mix of payers here?
So we anticipate that the majority of patients with the eligible will be commercial patients, but potentially the significant majority. And in fact, that might be skewed when it comes to the patients that actually have access to Tecelra, at least in the short term. So I think there'll be commercial, Medicare, and then Medicaid patients later on as we sort out the reimbursement for Medicare.
Got it. I'm not sure if you wanted to touch on, like, how many apheresis might be expected before year-end?
Yeah. No, no, we do not want to touch on that, but we will update as we do those apheresis, and you can expect that we will update in our quarterly calls in November, and subsequently. The idea with that is we will update on ATCs. The number of ATCs we've got up and running, because that's obviously a critical leading indicator of the ability to get patients treated. And we'll update on the number of apheresis, on the grounds that that is probably the single most useful piece of information we can give that's in advance of actual dosing, which will trigger sales. So it's a way of getting to some slight upstream version of what sales will look like.
There will still be drop off between apheresis and ultimate sales, of course, but it's the best marker we've got for how the uptake is going to be going. And then in due course, probably next year, we'll be updating on actual patients dosed and or treated, and the sales themselves, and therefore we will stop at some point talking about apheresis because it won't be relevant.
Got it. Got it. In terms of ATC rollout, you mentioned 6 to 10 in the near term, right? Onboarding that many centers. How many patients are covered by those centers?
It sort of depends on which centers actually make it into the 6 to 10. We said 6 to 10 because that's what we think we can do within the launch window, but this, we've obviously got out to larger number than 6 to 10. We've got out to almost all of the centers that we had clinical trials with, and they're just at different stages of getting up and running. Ultimately, they will all be up and running. It's 6 to 10 on the route to 30 by the time we launch lete-cel, so lete-cel will launch into the full network of 30 centers. The number of patients that those see vary quite dramatically.
I mean, obviously, there's a bit of a difference between MD Anderson Cancer Center and City of Hope, for example. Both are experienced cell therapy treatment centers with sarcoma centers, but MD Anderson obviously has quite a few more patients than many of the other centers. So the number of patients that we cover by those 6 to 10 will depend on which one's actually open within that window. But I don't want you to think about that, okay, we're going for 6 to 10 , and then we're just stopping for a while, where this is 6 to 10 within the first 90 days on the trajectory to 30, which the 30 we anticipate cover approximately 80% of the patients who get seen within the sarcoma centers of excellence. So, so.
Got it. Great. Let's talk about lete-cel. This is another T-cell, TCR T-cell therapy, but also for sarcoma, but targeting a different antigen.
Yes.
Right? So can you talk about your, you know, first of all, maybe let's talk about the efficacy of lete-cel. How does that compare with Tecelra?
Yeah. So, based on the data that we have at present, which was presented at ASCO, planned interim analysis of 45 patients with a minimum of 6- months follow-up, the response rate was 40%, for both myxoid/round cell liposarcoma and synovial sarcoma, with an equal split in the number of patients. So of the 45 patients, it was 23 of synovial and 22 of myxoid/round cell liposarcoma, and the median duration of response was also, you know, fairly similar at 10.6 months, although that's immature. The final readout of the data will be made public later this year, with slightly over 60 patients in total, with 12 months follow-up minimum.
So, we intend to present that at CTOS later this year, in early November. So I think it looks much more similar than it does different, with the added factor of myxoid round cell liposarcoma representing approximately half the patients in the trial.
Got it. So, I can clearly see the myxoid round cell liposarcoma is a new opportunity, covered by lete-cel. But at the same time, lete-cel does also go after the synovial sarcoma population, which has quite some overlap with Tecelra. Is there an opportunity? What's the strategy for that overlapping population, I guess?
Maybe I'll talk about how we think about that in the sarcoma franchise and how we've positioned that. We have these products. They obviously, lete-cel will be coming about 2 years after Tecelra. Tecelra will already have been established in the marketplace, treating MAGE-A4 positive HLA-A2 patients. What we've said is we think that sarcoma franchise in the US only, in the launch indications only, is about $400 million peak sales opportunity for us. I think that's becoming clearer now with we've released stated pricing, and now the opportunity for penetration into these markets is clear.
In doing so, we basically use the idea that if a patient is MAGE-A4 positive, that they would get Tecelra, and that the only patients with synovial sarcoma that would get lete-cel would be the ones that were NY-ESO positive and not MAGE-A4 positive. Okay? And so it's only incremental patients. In reality, I think the discussion will be a little more complicated than that. And the patients who are dual positive, there'll be a decision to be taken. Do you get Tecelra or do you get lete-cel? And that, that'll be the first decision, and that will probably based on a variety of factors, including the physician experience with each of the products, which target you test more positive for, the patient experience with the chemotherapy regimens, at least in the clinical trials, are slightly different.
So there could be some number of factors. Long and short of it is, actually, we don't care because either one of them will be the standard of care in the post-chemotherapy setting for eligible patients. And so, and then there's another interesting opportunity, which is, okay, what do you do when that patient responds, but maybe that response disappears after a couple of years? Or is there the opportunity for sequential use of these products? Is there, over time, the opportunity for combination use? Would two targeting two, if they're dual positive, would targeting two things be actually additive?
And so I think there's opportunity as we think about how to expand the franchise, to be able to think about how to leverage both of these products, either of which is a great opportunity for the patient, and it might be that both of them could be over time.
Great. Yep, thank you for help with that. Maybe also help us understand the $400 million peak sales, right? So these are rare tumors.
Yes.
Right? So how do we come to that $400 million opportunity?
So I want to quite reiterate that $400 million opportunity is we believe in the launch indications only, which is essentially post-chemotherapy for lete-cel, and we anticipate similar. Launch indications only and the United States only. So there's plenty of opportunity to go beyond that in other indications. But how do we get there? It's relatively simple. There are about 1,000 patients who would be addressable population on the basis that patients who are MAGE-A4 positive with synovial would get one of them. Patients who are NY-ESO-1 only would get lete-cel, and then the MRCLS patients would be able to get lete-cel. That's taking...
The thousand, little over a thousand, is taking into account our best understanding of what we think the incidence and prevalence of these tumors are, and also best understanding about the HLA expression and the HLA and target status of these patients. So if you think about a thousand patients, we've talked about the pricing, that we've said we've made public the pricing at $727,000. And so therefore, if you think about those numbers, you need to be thinking about a little more than 50% penetration to get to the peak year sales. So is that a reasonable number? So very much so, and the reason is that this is not a, this is not, and unfortunately for the patients, is not going to be a particularly competitive space.
When we had our investor day in April, Dr. Druta was asked what percentage of patients, of eligible patients, would you put on this therapy? Dr. Druta is sarcoma physician involved in our clinical trials at the Moffitt Cancer Center down in Florida. She was asked, "What percentage of eligible patients would you put on the trials?" And she sort of said, "Well, if a patient was MAGE-A4 and HLA positive, I would put them on the Tecelra," so I guess 100%. So I think there aren't other options for the patients that are eligible. And so if you look at other rare oncology indications where there's a similar paucity of treatment options for patients, it looks more like a rare disease model than it does a sort of highly competitive model in the oncology space.
And so we think that that's quite reasonable to get to for peak sales.
Great. Thanks for framing that opportunity, very helpful. Perhaps we can talk about uza-cel. You recently had this partnership with Galapagos for uza-cel. So I guess my first question is, is uza-cel still a focus for the company? Yeah.
I would say yes, absolutely, just very simply. We are continuing with this SURPASS 3 trial in ovarian cancer with uza-cel on our platform, which we anticipate will have initial data readouts in 2025 and full data readouts in 2026, and that has the opportunity to be a registrational trial for platinum-resistant ovarian cancer patients who have received other therapies as well.
I see. And Galapagos will have the option to opt into this, ovarian cancer?
They have the option. We will complete the head and neck study with a pilot study with uza-cel, the construct for uza-cel, using the Galapagos decentralized manufacturing network platform. On the basis of that proof of concept study, which we anticipate enrolling over the next couple of years or so, Galapagos can take the decision whether to opt in. If they opt in, then they can opt in. There is a variety of scales that they can opt in at, and that includes the opportunity to opt in for, to put this on their platform for everything. They would. This would then be a different product. They would then have to repeat the clinical trials for ovarian cancer. We think we have got a very nice opportunity.
We'll be on the market for many years before Galapagos has the opportunity, if that's the route that they choose. Why might they not choose that route? Well, that speaks to why the Galapagos deal was so interesting to us at the time. So, in ovarian cancer, like in synovial sarcoma, we are able to treat the majority of the patients that we enroll in the study because whilst these are very sick and largely heavily pretreated patients, they do not deteriorate super rapidly. That is not true for some of the other indications, and in particular, for head and neck cancer. That's why we picked that as the first indication to go.
The opportunity presented by a 7-day vein-to-vein process, fresh product in, fresh product out on the distributed manufacturing platform, to ensure that we can get to more patients, would transform the economics of the development of that indication for us, and ultimately, we think could transform the patient experience and the efficacy of the product, because the patient is not waiting for 6 weeks. That's very difficult for an advanced head and neck cancer patient to do. They can have a turnaround pretty much as quickly as they could get any other therapy. And so, that as an opportunity is great. That works in head and neck cancer. It's really important in head and neck cancer. Actually, less important in ovarian cancer, because the patients don't progress quite as rapidly or precipitously.
So that's why we think we still have a great opportunity in ovarian cancer, subject of course, to the data readouts next year. And we will pursue that if the data supports the development of that product. And then, Galapagos will come behind with other indications, we hope and anticipate, if the data from the head and neck study is as good as we would like it to be.
Got it. And the rapid manufacturing turnaround they can achieve relative to your approach, what is the key difference that make the turnaround time so different?
I'm convinced that our partners, Galapagos, would do a better job of explaining this than I will. But the Cocoon manufacturing system, with the wraparound infrastructure that Galapagos have developed, enables fresh apheresis product to go into that system and come out and be delivered to the patient fresh. They have developed a set of lease approaches to that that enable that to be done on the basis of a fresh, not a frozen product. And they have just actually had their first U.S. IND. They've been using this in European centers for a while. First U.S. IND accepted for their hem/onc CAR T program on this platform.
And we will be advancing this in the head and neck study, so we will have the first IND for a solid tumor with this platform. And I think the opportunity there is to get this into a distributed network and to shorten that time. And then there's another opportunity, which is there's a question about whether fresh product in and fresh product out actually would change or improve the phenotype of the cells and the efficacy profile of that product. Certainly, nobody thinks that freezing the product at the front end and back end is particularly positive. But whether the fresh in, fresh out approach works or doesn't work, our view was the 7-day turnaround would be really useful for these patients.
Great. And also on that deal, I think, as you mentioned, Galapagos is moving forward with head and neck. But you also had urothelial carcinoma data, right? That's part of the package of data from the SURPASS trial . I thought the urothelial carcinoma response rate was also very good. Has anything, you know, is there any further update for urothelial carcinoma, and why was that not mentioned in the collaboration?
The urothelial data, as you said, is very promising. In the context of the relationship with the Galapagos, we chose head and neck cancer first, to be able to study, given really the very high response rate and the drop-off of patients in the manufacturing and waiting time, for those patients, where we could have the highest impact. We didn't wanna put multiple tumor types into that trial, because, it'll just give us faster data in... with the greatest chance of success. I think that there would be every opportunity down the road to bring urothelial cancer into the same paradigm.
They also are a patient population where patients, the difference between a one-week waiting period and a 6 to 8 week waiting period is crucial in that patient population, and even before you put a patient into the trial, it's a different conversation to say, "Hey, you're gonna wait a week for your drug," as compared to a couple of months, so I think that there could be every opportunity for us to, you know, in collaboration with Galapagos, depending on the direction of travel with, you know, where they opt in, the evolution of our relationship, that urothelial cancer at some juncture down the road could return.
We didn't think it made sense for us to be delivering to be working on urothelial cancer on our platform when they have the opportunity to opt in and we would never be able to deliver a commercial product by the time that they would wanna opt in, so it didn't really make sense for us to do it on our own, but I do think there's the future possibility for us to do that together.
Got it. Thanks for explaining that. Let's at least touch upon cash runway. Can you remind us of your cash position and expected runway?
At the end of Q2, we had about $215 million, a little less than $250 million dollars of cash and cash equivalents, et cetera. And at that point in time, that was up a little bit from the position at the end of Q1, and on the basis of the transaction that we did with Galapagos, but also on the basis of a debt facility that we entered into in Q2 as well. And what we've done is we've said... We had previously said that we had cash runway to the end of 2025.
We've started basically not giving cash runway guidance, primarily because if we give cash runway guidance, we will be basically giving sales guidance at this point, and we don't want to give medium-term sales guidance. Because there's a lot of smart people there who are capable of basic addition and subtraction, and will be able to very easily back calculate the sales that were implicit in that. So we've not done that, but we are feeling well-capitalized as we go into the launch of Tecelra, and we have the opportunity to really see what that product can deliver. We've not therefore updated the sales guidance.
We did give expense guidance for the remainder of this year and for next year, and that guidance was that we expect our operating expenses to continue to be about what they were in the first half of 2025 .
Okay.
2024 , sorry.
Okay, got it. And last question is, would you look to strengthen your balance sheet at some point?
Yeah. I think one of the things that we've done, we've had a really good track record as a company of creative financing using a mixed model. So just to put the fine point on that, in the first 6 months of this year, we raised or gained access to about $255 million of capital through the transaction with Galapagos, the debt financing, and we used the ATM. Only about $30 million of that was equity, and so I think that and if you go back over the history of the company, that's been pretty consistent. We've not got that particular ratio, but it's been pretty consistent that we've been able to leverage business development, other sources of financing, including R&D, tax credits, et cetera, as well as equity when the price is reasonable and right.
We are not alone in the sector feeling dramatically undervalued at the moment. We will almost certainly need more capital before we become fully profitable, but we are confident that we'll be able to access that through those mechanisms in due course.
Got it. Very helpful. Thanks for a very helpful session, and thanks, everyone, for coming to the session.
Thank you.
Great.
Thank you very much.