We've still got a few minutes, right?
Oh, I think we're a little late. It's 1:10 .
Oh, is it 1:10?
Yeah.
I wonder why this guy keeps flying in his day.
Yeah.
Because 1:20. The mic's back on?
Yeah, they've been on, I think.
The mic's on my arm. Double verification.
You got to turn it back on. Is it working? All right, mine's working. All right. Good afternoon, everyone. Welcome again to day three of TD Cowen's 45th Annual Healthcare Conference. My name's Tyler Van Buren, Senior Biotech Analyst at TD Cowen. For this session, very excited to have a fireside chat with the management team from Arcellx, and from Arcellx, it's my pleasure to introduce Rami Elghandour, the Chairman and CEO, Chris Heery, the Chief Medical Officer, and Michelle Gilson, the Chief Financial Officer. Rami, Chris, Michelle, thank you very much for being here. It's a privilege.
Thanks for having us, Tyler.
Before I get started, for those in the audience, feel free to chime in and raise your hand if you have a question throughout the discussion. But why don't we go ahead and start with the incredible top-line data that you all presented at ASH, maybe just with a brief overview of the key highlights that you guys presented?
Sure. Thanks, Tyler. And before we jump into that, maybe just laying a little bit of background, we have really two primary objectives over the next couple of years. The first one is we have what we believe is a best-in-class therapy, and we have an absolute opportunity and responsibility to launch this in a way which we believe will set anito-cel up as the category-defining product in myeloma, and particularly in BCMA therapies over the next couple of years. Anito-cel has that kind of potential, and we certainly owe it to the patients that can benefit from this therapy, the physicians who utilize these therapies, as well as everyone who's been involved in the development of this therapy to position it where it belongs, which is really as the go-to treatment for patients suffering from multiple myeloma. And it is pretty rare.
Typically, particularly in this phase of the organization where we're pointed towards commercialization, you're often looking for the angle for your point of differentiation. It is pretty rare and special to have every arrow point in a direction of anito-cel. You start with the efficacy component of this therapy. It appears to be best in class from an efficacy perspective, and particularly given it seems to work really well across a range of patients. So if you're a physician, you don't have to really think about, well, is this patient too sick? Might they not be able to tolerate the therapy well? Might not be as effective. From a safety perspective, it's perhaps where there's been a lot of focus on the differentiation. Notably, as of our update at ASH last year, we've had no delayed neurotoxicities of any kind in 155 patients treated.
We have three times the rate of no CRS at all with anito-cel relative to some other therapies. Roughly 50% more patients have Grade 1 or less CRS, and half the number of patients that have ICANS relative to other therapies. So that is a really attractive safety profile that we believe will drive significant adoption. Obviously, in CAR-T therapies, you need scale, and you need reliability. I'm sure we'll talk about this more later, but with Kite manufacturing right now, we're able to achieve a turnaround time that is consistent with their commercial CAR-Ts, which is under 17 days. And as I've talked about in prior discussions, Kite has the capacity for 24,000 patients within their existing system, which gives us the ability to really scale this therapy for the patients who need it most.
This is an incredible opportunity where, again, it is rare to have every one of those things line up in favor of one therapy. Usually, you have some advantages. You have some deficiencies. But in this particular case, we feel like all the arrows point towards anito-cel. And that's particularly important as we'll get into the market composition, because as these therapies move into earlier lines, the things that matter most are safety and manufacturing and accessibility, and those are the particularly notable advantages for anito-cel. That's job number one. We have to position this therapy. We have to launch it in a way that is commensurate with its potential, again, for patients and physicians. The other element of our organization is to make sure that we're investing for the long term.
From a pipeline perspective, we're excited to bring a second ARC-SparX target, antigen target to the clinic in AML this year. We already have a program targeting CD123 in the clinic. We're just kicking off our myasthenia gravis study in autoimmune, which we're also excited about, and we're continuing to progress our solid tumor pipeline and hopeful to be able to talk about that more in the future, so with that backdrop, we feel like I know, obviously, you've got a lot of detail you want to go through here, Tyler, but it's important to anchor folks to the big picture, which we feel as an organization we're very well positioned to deliver on. In terms of the iMMagine-1 results and phase I results from ASH, I think I touched on some of those.
From a phase I perspective, we hit a 30.2-month median PFS, which is pretty remarkable given over 2/3 of those patients were high-risk patients in our phase I study. And from an iMMagine-1 perspective, I know everyone focuses on the top line of a 62% CR rate, but we had a 93.1% MRD negativity rate, a 93.3% six-month PFS rate, and a 78.5% 12-month PFS rate, which are all, again, tracking to a best-in-class profile. And I touched on the safety data a little bit earlier. So we feel like these results, again, encapsulate the potential for anito-cel to really help a lot of patients, and we're excited to continue to move this program forward.
Thanks for that great introduction, Rami. I want to follow up on the iMMagine-1 data. So just to be clear, we're going to get an update mid-year and second half, right, by the end of the year?
That is correct. Yeah, our goal is, we're working towards a mid-year update, likely at EHA this summer, so we hope to see some of you in Milan. Certainly, that data will continue to mature, and we expect to present again towards the end of the year.
Why EHA as opposed to ASCO?
I think that's a great question. From a hematology perspective, EHA is obviously much more well attended, and as you think about iMMagine-3 enrolling right now, that is a global study. When you think about the impending kind of commercialization that I just talked about at the outset, that we're on the precipice of launching into, from an operational perspective, EHA made a lot more sense for this particular data presentation, particularly coming off the heels of ASH, which was in the United States.
As we think about the expectations for that update, as I know you all recall, but during the ASH abstract last year, we had a certain amount of follow-up, and people were expecting there to be more follow-up, or significantly more, at the presentation because they weren't aware that you had these earlier patients that was kind of keeping that median follow-up around a similar time frame. So can you just talk a little bit about what we should expect from the median follow-up with the potential EHA update and what might be the best comparator for that data?
Yeah, I can take that one. So yeah, because now we will have all of the patients who have been dosed, both for safety and efficacy, the median follow-up will probably be in the range right around 12, 12 and a half months, depending on where the data cut happens. And the best comp is really to look at the data cut with CARTITUDE-1 with a similar amount of follow-up. So that tends to be the best predictor. The median follow-up tends to be the best predictor of the CR rate. And so we do expect the CR rate to continue on that sort of scaled increase over time that is proportionate to the amount of median follow-up you have in the population.
And so the 12, 12 and a half months, I guess that would be the CARTITUDE-1 ASH 2020 presentation.
Correct. Yeah, that'd be the closest comp in terms of CR rate. Again, MRD negativity, we don't expect to fluctuate very much. There will be more patients in the denominator. There are very likely to be more patients in the denominator. And then we may be able to give further updates on landmark analyses as well. But as we've done in the past, we don't think it's a good idea to look at Kaplan-Meier curves this early in the follow-up because the tail of those curves tends to be less reliable. Instead, looking at landmarks gives you an idea of the shape of the curve, and you can look at the confidence intervals at those landmark time points to get an idea of how confident you can be in those landmark analyses.
Could there be any surprises, or should we expect kind of what we saw at ASH with longer follow-up?
Yeah, I mean, I think the evolution of the data is probably the right expectation overall. If there were going to be any surprises, I'm not sure exactly what that would be. The data package that we presented at ASH, we think, already demonstrates this best-in-class profile. It's just a matter of playing it out with more follow-up so people can see how that goes. I don't know yet if we will have enough follow-up in subgroups to look at subgroup analyses. That would be one thing that we do intend to present. I just don't know if it can be mid-year or it has to be later this year.
And I think I'd just add, from a safety perspective, having the entirety of the population and having them with sufficient follow-up to cross the threshold in which you typically see these delayed neurotoxicities will obviously be a very meaningful update.
Yeah. Yeah, and to that point, all of our patients will have more follow-up than sort of the long end of the follow-up required to observe some of these delayed neurotoxicity events. So I think if we continue to present a lack of that, you can even increase your confidence further that that is not an adverse event profile that is associated with anito-cel.
There's still no delayed neurotox or Parkinson's events to date?
So that's not something we're updating at investor meetings. So just to give a little bit of history here.
I had to ask.
I know you have to ask, Tyler, but it gives us an opportunity to put this on the record. So last year, some intrepid analysts broke through and got an update on an earnings call on this topic. Given the impending presentation of iMMagine-1, we felt like there was an obligation to continue to provide those updates. But we are aligned with our partners at Kite that, as is typical, clinical data, including safety data, is presented at medical congresses and not on webcasts. And so we are, and we aligned with them about that last year, frankly. It was not a contemporary thing now. The plan was to continue to provide these updates until iMMagine-1 was presented in December and then revert back to a more normal schedule for release. You will have to wait till EHA, Tyler.
That's not a bad spot to get the update. Can you talk about how many patients you all have treated with anito-cel so far? Clearly, if a single case of delayed neurotoxicity pops up, the rate is going to be way below 10%-20% like we're seeing with Carvykti. Then even if a single case of Parkinsonism pops up, right, that rate is still going to be well below 1%-3%. Maybe an update on the patients treated.
Yeah, so maybe Chris and I can tag team this a bit. But one of the things, the core things that we all have to appreciate here is that we are all utilizing different therapies. It is not like everyone is using the same binder, and one therapy is seeing these cases and the other one is not. Like our binders, which is the core differentiation between these therapies across all three of the BCMA CAR-Ts, Abecma, Carvykti, and anito-cel are different. And thus, it is not unexpected that you would see different results. As I mentioned at the outset, we have three times the number of patients with zero CRS. We have nearly 50% more patients with Grade 1 or less CRS. Those things clearly point to a differentiated safety profile. So it is not surprising that, consistent with that, there is a difference in this particular category.
I think secondarily, as it relates to these toxicities, they are overwhelmingly and frankly almost singularly related to one agent in this particular class. So the idea that it is a class effect, further to the point I just made, is just not empirically supported. It is clear that it is consistent we presented this at ASH that 93% of the cases are related to a singular agent. Now, you're dosing patients that are older. And so to your point, Tyler, inevitably, some patient that is dosed with anito-cel will develop Parkinson's. Do we think that a single case like that would be indicative of a correlation to the drug? Absolutely not. We remain extremely confident in a differentiation of the profile of anito-cel generally and very specifically on this point.
I think there's also I think you'll get to it, but there's a lot of chatter around ways to mitigate this. Frankly, it is, again, in our belief that it is related to the binders. It is why we have not seen it. It is why the rate of this particular event is 0.2% with one of the other agents and 10%-15% in totality with the agent that is most talked about. So I don't know if there's anything you want to add.
The number of patients treated, maybe? Just the last update.
So it's north of 155. I mean, there's 155 between the phase I and iMMagine-1, plus obviously, there are patients being treated in iMMagine-3 right now.
Yep, sure.
So to be clear, because this is the biggest pushback that I get, is not because of patient selection or steroid use like a competitor has said to my client base.
Yeah, well, again, good question. That was my next question. Thanks, Jay. So yeah, I mean, I'm sure you guys, like us, have been receiving inbounds from investors on the presentation from Carvykti from the Tandem Meetings. So what's your reaction to that presentation?
Yeah, I'll pass it over to Chris and Michelle, and they can go into that in more detail.
I'll answer the first part of the question, and I'll let Michelle take the other part, which is if there were something that people could decide or decipher about which patient was not going to have this problem, they would probably do it. That is not the case. We don't know some secret formula that prevents something that just never happens with our drug, right? It's just that it just doesn't happen. So I don't know where that comes from. And in fact, when I speak with the clinicians who have used that agent the most and are observing these things, what they actually express frustration about is that they cannot predict which patient they should be most concerned about and that they don't know who they need to aggressively intervene for and who they don't. And that is actually the biggest challenge.
They're having to make very difficult decisions about potentially younger patients who need the therapeutic effect but may need to use high-dose chemotherapy to eliminate the risk of a severe neurologic effect. So I'll just answer that part of the question. That is illogical as far as I can tell and is not supported by any of the conversations I've had with clinicians. And then maybe Michelle can take the topic of some of the data we've seen.
And so some of our competitors presented data, or I guess there were case series presented about a competitor product at this meeting called Tandem last month. And I think that just kind of level setting here, there were several presentations that actually were very important to this topic. And so we have heard a lot of questions on one particular presentation, but I do want to level set that there were three or four presentations that were just solely focused on trying to manage and mitigate and figure out correlates for the very unique to Carvykti toxicities that have emerged as a basket. And so these would include the delayed neurotoxicities, which these real-world case studies from centers were showing 10%-20% rates of the basket of delayed neurotoxicities, seeing that CARTITUDE-1 rate of 5% pop up again on the Parkinsonism.
These are recent real-world case series, as recently as fourth quarter 2024. Then one of the probably more surprising posters that popped up was a case series from Mayo showing a 6% rate of Carvykti-induced enterocolitis. When you start to add up all of these very Carvykti-related, Carvykti-specific toxicities, it's not surprising that there was so much attention and focus in these presentations about how to identify and mitigate these toxicities because they're clearly a problem that has persisted, including into the Q4 FAERS, which also recapitulates that 5% CARTITUDE-1 Parkinsonism rate. I think that it's very important to just understand that the reason these presentations exist and the reason these sites are publishing them is because this is a real problem that physicians are dealing with.
There was one particular poster that we get a lot of questions about, and it was one where an institute called Colorado Blood Cancer Institute implemented a prophylactic steroid regimen to try to see if they could mitigate these delayed neurotoxicity events. And the poster was a little bit ironically named because I think if you actually look at the underlying data, you can see that what the poster was named on mitigating these events was not actually happening in the underlying data. So they presented ALC data, which is indicative of CAR-T expansion. And that ALC data showed that the highest expanding Carvykti expanding patients, or the highest ALC patients, were in the prophylactic steroid group. And also, they had two cranial nerve palsies out of their case series of eight patients.
This is exactly the rate that you would expect, exactly the rate that was outlined in a Mayo poster that was also presented. I would say these data actually don't support an underlying conclusion that prophylactic steroids mitigates unrestrained ALC and unrestrained Carvykti expansion, which has been seen pretty much with all of the cases of these delayed neurotoxicity events. There is an underlying mechanistic reason why that shouldn't happen. I'll pass it to Chris to go through that.
Yeah, I think this topic has come up quite a bit, and I've been able to share with some people in one-on-one conversations that one of the challenges that you used to get with CAR-T cells was, "Oh, I don't want to use steroids because it's going to mitigate the cell expansion," well, that's actually not true, and it's been proven to be not true now in multiple clinical trials and in preclinical in vitro settings. The reason for that is actually fairly straightforward. The way that a T- cell is actually activated in a native T- cell population is through two signals, at least, sometimes three. The first signal is the passage of the antigen via MHC to the T- cell receptor. That's called signal one.
And the second signal, which is also referred to often as co-stimulation, is what really tells the T- cell to become fully activated to be ready to kill. Steroids actually prevent the passage of that second signal. And the reason T- cells don't expand in the presence of steroids, native T- cells don't expand in the presence of steroids, is because they're not getting the second signal that they need because the steroids are actually affecting the dendritic cell, the antigen-presenting cell. However, in a CAR-T cell, we hotwire the second signal into the CAR, right? So the signal, the first signal, is actually all the signals that you need. And if that signal is happening either through tonic signaling, which is antigen-independent cross-linking of the CAR, or if it's happening as a result of antigen, in either case, steroids don't affect CAR-T cell expansion significantly.
In fact, that's been demonstrated in the ZUMA-1 trial where early aggressive use of steroids didn't affect peak or area under the curve of cell expansion but did actually decrease the total amount of steroids that had to be given. And the reason that's important is because it actually reduces the risk of infection. It's part of the reason that we used one dose of steroids with every dose of tocilizumab that was going to be given in our study because the literature says this is what you should do. However, that has zero impact on the likelihood of the delayed neurotoxicity effect, which was something that we heard on a panel that we hosted at ASH for multiple investigators and also, I think, is supported very well by the literature we have.
I don't think the posters we saw at the Tandem Meetings do anything to suggest otherwise at this point.
Now, the last thing I'll add before we rest our case here, which Chris and Michelle, I think, highlighted magnificently, is that statistically, besides the mechanistic explanation, statistically, to have seen zero cases with the amount of follow-up that we had at ASH out of those 155 patients, given the rate that you just heard across so many different real-world studies, FAERS database, et cetera, there's probably as many zeros in that P-values as there are in this room. It is statistically very different. So we're talking about scientifically different, empirically different, statistically different. We rest our case time.
That was great color. Thanks for that. Clearly, there's an unmet need on the safety front. So we need to get anito-cel to the market to these physicians. So what's left to be done in terms of the BLA filing? How much follow-up do you need? I understand there was this tail of patients towards the end, but you over-enrolled. It's larger than, I think, any of the other studies. So what needs to be done to file the BLA and get anito-cel approved?
Yeah, just to touch on that last point, we actually just were given our higher rate of manufacturing and less dropout. We just had more patients dosed, really. And I think that's an important distinction. It wasn't necessarily just an over-enrollment. I think from a go-forward perspective, we feel very confident and ready to launch this therapy. I think, obviously, as you asked about from a regulatory perspective, the question is, what is it going to take to get this on the market sooner rather than later? We've reiterated our guidance, both us and Gilead Kite, that we expect to be on the market in 2026. I'll reiterate that again now. We're confident in that. So the question of follow-up really comes down to two things. One is, is there an unmet need?
I think for all the reasons we just talked about, from a safety perspective, there is a huge unmet need, but also from an access perspective. We've talked about potentially being in twice as many centers in iMMagine-3 than some of our competitors are in the market right now after years of being on the market. So I think access remains a challenge in CAR-Ts. And look, there are precedents. Abecma was approved with nine months of follow-up. Breyanzi, I believe, was approved with about six months of follow-up. So there is an unmet need, and there is precedent to get this CAR-T approved sooner rather than later. And I can tell you that both the Arcellx and Kite teams are working very hard to make that happen.
From an operational perspective, if we were, we can certainly launch much earlier than the regulatory path would allow us to. I think we are very ready.
Speaking of regulatory path, is it possible that you guys get a priority review given the improved safety profile? And if you don't, could Kite-Gilead use a priority review voucher?
We're very confident in getting a priority review.
Okay, good. Just maybe quickly on manufacturing, which you touched on. So Kite-Gilead has said it's coming down to close to their commercial products, right? So 17 days or less. Obviously, Yescarta is at 14 right now. On our panel this morning, she just confirmed that, our KOL panelist. How does that compare to the other agents that are on the market right now?
Yeah, I think we've seen, again, from a real-world perspective, from physician conversations that vein-to-vein times are in the four- to kind of six-week time frame for our competitors. And I think it becomes harder and harder to drive it lower than that. But I think the bigger issue, and that's relative to, again, sub-17 days for us, and I cannot state enough how impressive that is that Kite has been able to execute on this right out of the gate. Now, we were obviously confident. We had 100% manufacturing success in our phase I, 99% in our phase II. So we feel like anito-cel is intrinsically manufacturable relative to other CAR-Ts. But to actually see Kite operationalize that, that is very impressive. And again, competitors have been at this for years and are still in the four- to five-, six-week time frame.
Kite right out of the gate is sub-17 days. So I think that says a lot.
Great. So three minutes. I'll try to knock off the rest of the topics. iMMagine-3 second- and fourth-line trial. Where are you at in terms of enrollment, when we could get data, and how that expands the market?
Yeah, so we're going to go rapid fire here. So we have consistently said that we would expect to have data from our early line trial within about a year of launch. And so that continues to be our expectation.
Okay. How much larger do you think that second line plus opportunity is relative to fourth line plus, which you plan to get approved in next year?
Yeah, so again, consistently, we've said this market's approximately $12 billion plus for a lot of different reasons. We believe it can continue to increase, and second line's about half of that opportunity. Fourth line plus is about $3.5 billion of that $12 billion market.
What about first line?
First line, we believe, could help drive first line plus some other factors could help drive this market north of $20 billion.
What can you tell us about the iMMagine-4 study design and when you plan to initiate it?
No update on iMMagine-4 at this time. It's something that we're excited about and committed to, but in the interest of time, no update right now.
Will there be an iMMagine-5?
There will likely be more myeloma studies. I don't know what they're going to be called.
Fair enough. All right. Maybe we'll move to autoimmune in two minutes. Just look, I mean, clearly, you have a differentiated profile. In your opening remarks, you talked about actually, what was it? I'm going to remind myself. You said category-defining product, but clearly not just in myeloma. You're talking about B-cell therapies in general and BCMA CAR-Ts. So how do you expect to differentiate in autoimmune conditions, and when might we get the first data there?
Sure. Chris, you want to take that?
Yeah, really quickly, the first indication we're going after is myasthenia gravis. It's relevant because we know that that is a disease driven by antibodies, and those antibodies are made by short and long-lived plasma cells, all of which express BCMA. So eliminating them should eliminate the disease-causing agent, the antibody that causes myasthenia gravis. We chose myasthenia because of that clear mechanistic rationale. We've already seen data with another BCMA CAR-T that is fairly impressive, even though we believe that anito-cel is a much more potent killer of plasma cells than that CAR-T cell is, and those are sort of by design different. One important thing, though, is that anito-cel is able to accomplish that with what appears to be a very good safety profile, and we think for these indications, you have to have a safety profile that is even better than what you can expect in oncology.
We do believe that that is very possible in these indications. When will data be? We don't know quite yet. It will not be this year because we're just really kicking that study off. Then also, what we see in that study will decide for us whether we go into other indications with similar mechanistic rationale.
We're not going to have time for the ARC-SparX AML program, but we'll send everyone home with some homework. And cash runway, do you guys just talk about the dynamics there. Do you need like $2 billion of revenue to be profitable, or when do you reach profitability? What's your outlook there?
So maybe I'll just give the cash runway guidance that we've given before, which is into 2027. We ended Q4 with $626 million in cash. And no, we don't expect to need to get to $2 billion in revenue to be profitable. We would expect that to come far before then.
Okay, wonderful. Time is up. In closing, I'd like to ask you guys what aspect of the Arcellx story do you believe is most underappreciated by investors right now?
You know, I think from a macro perspective, there's a lot of supporting this business. So it's not part of the IRA. There's no patent cliff. The bar for competition is really, really high. I think it's going to be a very profitable business. From a margin perspective, we feel like we can drive a very high gross margin. SG&A tends to not be as high in this market. You don't need like a ton of sales reps. So from a margin perspective, it's very attractive. And it's just an incredible opportunity where there's a lot of positive tailwinds to build a really, really attractive business, particularly given our partnership with Kite-Gilead, where, again, we're partnered with the best in the world from a CMC perspective manufacturing, which can be scalable.
And our deal structure also is very attractive. It doesn't create a lot of necessity to typical BD deal structures are raise money, execute, get reimbursed in milestones, right? We didn't take that approach. We have a much more cash and shareholder-friendly deal structure that's also a win for Kite-Gilead. So we feel like the totality of both sort of the macro where we are as well as the deal structure are still very underappreciated.
Great. With that, we'll go and wrap up. Thank you very much for your time. It's always a fun discussion.
Thanks, Tyler.