All right. Good morning, everyone. I'm Stephen Willey, one of the Senior Biotech Analyst here at Stifel. I'm glad to have with us, the CEO of Candel Therapeutics, Dr. Paul Peter Tak. We're just going to have an informal discussion. I believe there's a question function. If anyone has a question, you can populate those questions into that function, and we'll get them answered. Paul Peter, thanks for the time. Always appreciated. Any opening statements or brief overview of the company you might want to provide before we jump right into Q&A?
Thank you, Stephen. Great to be here. We just came from the American Urological Association big annual meeting in Washington, D.C. where we had the plenary oral presentation, which was extremely well-received. The energy levels are extremely high in the company. I'll just say this, Candel Therapeutics develops viral immunotherapies for very difficult to treat solid tumors. Think of prostate cancer, pancreatic cancer, non-small cell lung cancer, glioblastoma. We have two investigational medicines in the clinic where we have proof of concept for each indication and for each medicine. The first is aglatimagene, the second is linoserpaturev. I'm sure we'll discuss these in more detail. In terms of the corporate aspects, we brought together four, five years ago, a very strong leadership team with decades of experience in drug discovery and development.
We know what it takes to get the medicine over the finish line. I'm also a big fan of external peer review, we created, at the time, the research advisory board with people like James Allison, the Nobel Prize Laureate, Carl June, the father of the field of CAR T-cells, Philip Kantoff, very senior leader in prostate cancer, et cetera, who are very supportive. We are in very stable financial position, with a runway that could get us into commercialization.
All right. Perfect. I know we only have about 25 minutes here, so I want to spend most of my time on aglatimagene. Just given the phase III data that we have in hand for localized prostate cancer and the phase III data that you're hoping to generate in non-small cell lung. Can you just provide a quick overview of the mechanism? I know this is kind of like an in situ immunization effect that you're hoping to achieve and why you think this off-the-shelf therapy is well-suited for pan-tumor applications.
Yeah. First, it's a completely new approach, so therefore, I think sometimes people find it difficult to get their heads around it. What is it? It's not an oncolytic virus, but technically it's a form of gene therapy. Basically, the simplest way to summarize it is to say aglatimagene is delivered directly into the prostate, which is a very simple procedure in the hands of a urologist, takes 15, 20 minutes. In an outpatient clinic setting, you even don't need local anesthesia. A patient walks out of the clinic again. You only do it three times in a patient's life. As you said, it leads to an in situ immunization effect. Basically, we inject aglatimagene into the prostate. This is followed by two weeks of treatment with valacyclovir tablets. This is a generic tablet that helps to destroy the cancer cells locally inside the prostate.
As these cells break down, this will help actually to teach the patient's own immune system how to recognize and kill the tumor cells, as we've shown across multiple indications. It is indeed an off-the-shelf product. It's relatively simple to manufacture. There's no complex cold chain, but it leads to an individualized anti-tumor immune response. The goal in prostate cancer is to increase the chance that the patients will remain free from prostate cancer recurrence, which is the goal in itself for patients who elect to undergo radical treatment. Also to reduce the need for future self-administered anticancer therapies that are known to be associated with loss of quality of life. Why do we believe that this is a good strategy?
We've shown this in a large placebo-controlled clinical trial, but also in other indications that are characterized as very difficult, like therapy-resistant non-small cell lung cancer, pancreatic cancer, and others.
Okay. Definitely want to touch on a few of those things here over the course of the discussion. As you mentioned, you now have statistically significant phase III data in hand from this phase III trial that evaluated the addition of aglatimagene to standard of care radiotherapy in intermediate high risk localized prostate cancer. This was an incredibly heroic trial. I think it took 11 years to reach the primary endpoint. Can you talk about the rationale for choosing this opportunity as the lead indication for this asset? You don't usually see companies pursuing initial registration efforts that take more than a decade to read out.
Yeah, absolutely. I think the reason was it was the right thing to do from a medical perspective, right? Most biotech companies would not do this because you need near-term value-creating catalyst. At the time, the idea was there is no treatment that has been approved, we always say, in more than 20 years for newly diagnosed localized prostate cancer patients who want to be cured, basically, who want to eradicate their tumor. It's more than 20 years because I'm not aware of any medicine that has been approved. The only approaches that are used are radical prostatectomy, which is major surgery or radiotherapy. In both cases, there's a risk of recurrence, the disease coming back of about 30%. One-third of the patients will get recurrence despite the fact that they accept the long-term complications, and these kick in immediately after a radical prostatectomy.
Think of urinary incontinence, erectile dysfunction, loss of quality of life, et cetera. It illustrates how eager these patients are to eliminate that tumor. We try to help them actually to increase that goal. Yes, it took a long time, but we did achieve the primary endpoint in December 2024. This is behind us, supported by secondary endpoints, even confirmed at the histologic level, which is the gold standard to detect cancer cells. Now this field is wide open. This is a very big market opportunity for Candel.
The primary endpoint of this trial was disease-free survival. I know you had this endpoint specifically validated by FDA through a special protocol assessment. How is disease-free survival specifically defined in this trial? What does your KOL and market research suggest about the clinical meaningfulness of this, just given that two-year biopsies were kind of used as a surrogate for local failure, and we know that those aren't routinely conducted in clinical practice?
Yeah. disease-free survival is defined as follows. This is an event-driven endpoint. An event could be the presence of tumor cells in a two-year biopsy, which is the most objective and reproducible way to detect cancer cells. We can come back to this. The event could be evidence of local, clinically defined, or locoregional recurrence, but it had to be confirmed by imaging and/or biopsy. That's where this design is much more rigorous than of many previous studies that have been conducted. We would not accept that, let's say, a prostate felt larger upon digital examination, right? We needed to have imaging and/or biopsy at the least. This could be the presence of metastases, which are, of course, unlikely to occur within the first few years after localized disease treated with curative intent, but that would be an event.
Then death due to any cause. If a patient who died because of a car accident or because he fell off a ladder, actually, these things have happened, that would count as an event. You don't expect, with a median follow-up of, let's say, four, five, six years, any impact on prostate cancer-specific mortality. Indeed, we had only two prostate cancer-specific death in this trial, exactly as expected. I want to make the point that these deaths were unrelated to prostate cancer and were counted as an event, which means you dilute the signal. Despite that, we've convincingly shown the statistical significance of the primary endpoint. Why does that matter for a patient? Why is this clinically meaningful? All the key external experts agree with this.
We've done very extensive market research, both in the U.S. and in Europe, both in academic centers and in community centers, both with urologists and radiation oncologists. These are the physicians who treat these patients. 100% of the respondents said that they would adopt this approach. This has been externally validated by some of your colleagues, actually, who did their own market research. Different banks have published these results with exactly the same outcome. We hear this also from the SABs. You made a very interesting point. The two-year biopsy is not part of standard of care. Why not? Because it's not very pleasant to undergo a prostate biopsy. These patients are followed typically by regular measurement of PSA, prostate cancer-specific antigen, which you can measure in the blood.
The FDA did not agree to use this as an endpoint because it's quite unreliable, especially during the first two years. These patients still have prostate cells, right? Unlike when you undergo surgery. There's still prostate cells that produce PSA, and in fact, the prostate may become irritated as a result of the radiotherapy. You might see false positives. If you see over time a consistent increase in PSA levels, that suggests that something is going on, and that there may be recurrence, and that typically should lead to an imaging study and/or biopsy. Why did we include the two-year biopsy? Actually, this has been done in many radiation oncology clinical trials focused on localized prostate cancer. The reason is, this is the most objective gold standard research tool to detect cancer cells. That's one.
Second, it's known that this actually, the presence of tumor cells is real, right? It precedes the increase in PSA levels because you need to have a minimum number of tumor cells, of cancer cells before you are able to pick this up, actually, in the blood. There's a very beautiful meta-analysis based on 22 clinical trials that has been published, and people can find the slide on our corporate slide deck on our renewed website. It shows that the presence of tumor cells in a two-year biopsy is highly predictive, with a 10-fold higher odds of developing biochemical failure over time. That means PSA levels going up.
If the P value is smaller than 0.00001, extremely significant. The same is true for development of distant metastases with a threefold higher odds of developing distant metastases. Again, extremely significant, a fivefold higher odds of dying from prostate cancer. That's after 10, 15 years, right? Nobody will be able to do a clinical trial in early localized disease. Our goal is not primarily to have patients live longer with prostate cancer. We want them to live without prostate cancer, and we've shown this at the microscopic level in the two-year biopsies. An upside that we expect and predict after prolonged follow-up, and we will continue to follow these patients for many, many years, is that ultimately you will also show the improvement in prostate cancer-specific mortality, although that's not the primary goal of this treatment in this setting.
Okay. The recent update that you just provided at AUA included about, I think maybe another year of additional follow-up. How did the data from that presentation align with that correlation to some of these higher order endpoints that you're talking about in terms of biochemical recurrence, but more importantly, the appearance of metastases?
Yeah. That's a great question. We have found exactly what we have predicted in December 2024. First, we have reproduced it after prolonged follow-up. Now we have a median follow-up of 58 months. It is quite significant actually for a trial. We've reproduced the prostate cancer-specific disease-free survival. That's the same as DFS as I just described it, but here we exclude death that have nothing to do with prostate cancer. This is a better measure to continue to follow these patients, and it even looks a little bit better than in December 2024. Again, we have already achieved the primary endpoint. Here now we observe the hazard ratio of 0.61 and a p- value of 0.0031. Highly significant.
Our key external experts confirm that this is highly clinically meaningful, and we had a very good KOL, key opinion leader or key external expert call straight after the plenary session with three leading experts in the U.S. I would encourage people to listen to their external views, and they said this is extremely meaningful, and we would use this in all of our patients. We also found longer time to salvage anti-cancer therapy like long-term ADT, hormone therapy, that's basically chemical castration. This is a very big unmet need. This is very important if you can delay or prevent the need for long-term ADT. These patients may live longer if they have metastases, but it's a miserable life for many of these patients, as physicians and patients tell us.
We also found a lower incidence of and an increased time to metastases, to your point, observed in the aglatimagene arm compared to placebo. We also found a very clear and even stronger signal if you focus on the patients with intermediate-risk prostate cancer. This is 85% of the population in our trial, so this is a very homogenous population and a very large population still. That's why we provide this data, where if you look at the time to metastases, we observe the hazard ratio of 0.1. That means a 90%, 90, improvement in the time to metastases if you compare aglatimagene versus placebo, and this has already achieved statistical significance. It's obvious that this is clinically very meaningful. These data are extremely encouraging and completely in line with the meta-analysis that has been published and that I just alluded to.
Okay. On the metastasis front, I know a lot of our KOL feedback has suggested this is one of the better surrogates of longer-term outcomes, just given the challenge that you spoke to before about being able to show an OS benefit in these patients. I think there looked to be a little bit of a bifurcation in the data between the intermediate risk and then the smaller minority of high-risk patients, where I think there was actually a higher implied rate of metastases in the aglatimagene-treated high-risk patients. Do you think that this is just a difference of small patient numbers, or do you think that this data supports some kind of potential efficacy differential between the two risk subtypes?
Yeah, good question. First, I want to reiterate that the goal of patients who are willing to accept the complications of either radiotherapy or surgery is to get rid of that tumor. That's the goal in itself. Living free from cancer recurrence is the goal for these patients, and it's this whole world of psycho-oncology, the fear of recurrence, cancer-related anxiety, and then at some point, the need to use salvage therapy. We've achieved that. It is also true that it's great actually that we're starting to see improvement in the time to metastases and in the incidence of metastases in the ITT population, the intention to treat population. The FDA has been very clear that they want us to submit the whole package for the whole population in this trial rather than subsets.
We still provided the data for the intermediate-risk prostate cancer population because it's still significant numbers, right? Then you made the calculation based on that for the high-risk prostate cancer population, and then we don't see this clear improvement. You might say the opposite, right? It's almost impossible to believe that there's a biological rationale because we are focused on a very specific subset of high-risk prostate cancer, which is patients who could not have more than a single high-risk factor. They are biologically not different from intermediate risk. You would expect the same. The second is the numbers get really small in total, about 100 patients. This is statistical noise. That's how we see it.
Okay. I know you've guided to filing a BLA submission before the end of this year. Should we expect another cut of this data to be made prior to that submission, and will that next cut be made available to investors through a medical conference or some company press release?
We've not planned a new cut. These data are very fresh and very new. We've not even shared this data with the FDA yet because we have already achieved the primary endpoint supported by secondary endpoints. We went to the FDA, for this study, conducted under a SPA, special protocol assessment, which means there was agreement about the protocol, including the primary endpoint. We actually got, with the data in hand, an RMAT designation, regenerative medicine advanced therapy designation, which is, I think, great validation by the FDA of the data. We've achieved that. I think it's good practice to continue to follow patients, both for safety and for clinically meaningful endpoints, as we just described. We've presented these data.
At some point, we're very busy, very much focused on execution to get ready for the BLA submission, but at some point, we will publish these data. We're not planning to do this anytime soon again, because it's unlikely to change significantly. Let's say in one, two years, we will continue to follow these patients.
Okay. What is rate-limiting, I guess, if anything at this point, to your ability to file a BLA before the end of the year, and can you just speak to your level of confidence around being able to achieve any of those objectives in a way that allows you to meet that guidance?
Yeah. As I said, the top-line data readout was in December 2024, people have asked me, "What are you waiting for with your BLA submission? Why are you delaying?" We are not delaying anything. It has been our strategy very systematically to partner with one of the top manufacturers in the U.S., which is Millipore, also sometimes called SAFC in Carlsbad, California. We had already the contract in place. We had done all the enabling work. We had locked the process. We did not want to actually scale up commercial manufacturing because it's a very big investment, and it's not the right use of shareholder money before you've seen the data. Probability of success before data readout was probably in the order of 35% because that's industry metrics, right?
I've been global head of development of GSK, so I tend to think in risk identification and mitigation in a very systematic way on the portfolio level because we have multiple assets, and we could have survived even with negative data. Everything was positive, so one day later or a few days later, we did overnight financing and could actually press the button and start manufacturing. This is a biological product. This timeline is very tight. There's no pharma company that could do this faster than we in collaboration with Millipore. Everything is on track. The gating factor is CMC. We make very good progress. We have had very good meetings with the FDA. We are aligned in our approach, and we're still on track for the end of this year.
Okay. Maybe talk about the commercial opportunity a little bit, just in terms of addressable patient numbers and then where these patients are treated. What proportion of these patients are seen in larger academic centers versus those that are being treated at community urology clinics?
First, I should say that a small majority of the patients in our phase III trial were actually enrolled in community centers. This is not like a highbrow activity, right? In some of these centers, it was easier to do an intra-prostate injection than to actually collect blood samples for biomarker research. I do not make this up. This is very much aligned with normal clinical practice, is done with a very thin needle, often a 22-gauge needle. That's the same needle used for, let's say, the flu shot, right, or COVID-19 vaccination. People will understand how thin that needle is. This can be done very easily in any center. The addressable population is extremely large.
If you just have very conservative assumptions and you focus on the patients who are already self-selected because they have chosen to undergo radiotherapy as their radical treatment, because they could also have chosen radical prostatectomy surgery, right? It's about 50% currently that will choose radiotherapy for all kinds of reasons. You talk about, in the U.S. only, about 65,000 patients per year. Right? We believe that these numbers may go up actually, because now we have and that's what we hear from the key experts, also the surgeons actually, that now we have an option that leads to improved outcomes. Right? While the outcomes between radiotherapy and radical prostatectomy are similar, a risk of recurrence of 30%, we've now shown within the radiotherapy group that if you add aglatimagene, that you can reduce the risk by at least 30% of recurrence.
This is clinically very meaningful. That means that there's a hardcore group of patients who will choose surgery. There's also a psychological element. This is, "I was diagnosed with cancer, please get rid of my tumor as soon as possible.
Yeah
younger people. There are many patients that are the hardcore choosers of radiotherapy. For example, there's a contraindication for major surgery, or they don't want to have the immediate impact in terms of urinary incontinence and erectile dysfunction. There's a big gray group in between, where in the context of shared decision-making, this may shift now towards radiotherapy, because then after approval, as we hope we will be in the near future, there is a potentially better option. This is a very large group of people. Second point is, even if you model that only 20% or 30% of the patients will initially take this approach, right? Some physicians say, "I would use it in everybody," but even if you say it's 20%, it's still an extremely large opportunity. Another component is, of course, what's the price going to be?
We have given an illustrative range in our slide deck, showing the price of currently approved medical treatments in patients with more advanced disease. That's in the order of $150,000-$250,000 per year. Based on deep payer research, we believe that we will be on the higher end of this, because payers really seem to like this. Why? Because we've achieved the primary endpoint supported by secondary endpoints. It's seen as clinically meaningful. It's well-tolerated. We've not seen an increase in serious adverse events. Another important consideration is, it's like a one-off treatment, albeit consisting of three administrations, but that's it. It's not a recurring cost to the healthcare system year- after- year. This is at least a $10 billion-$16 billion market opportunity in the U.S. alone. Obviously, not only American men get prostate cancer.
The same is true in Europe, in other parts of the world. This is a large opportunity.
I know we're pressed up against time, maybe we can squeeze in a quick lung cancer question here. I know you're guiding to initiating a phase III, I believe later this quarter. You're looking to do this in the second-line setting, post PD-1, head-to-head versus docetaxel. Docetaxel's been a tough control arm to beat. I don't think we've seen any therapy beat docetaxel head-to-head on survival in the second-line setting. What gives you confidence when you look at the phase II data that this is going to translate to a potential win in phase III? How do you think about the logistics of administration in the setting of lung cancer specifically?
First, I would invite people to look at our data. Recently we gave an update. It's true that this has been a crowded area in terms of activities, but we've seen nothing that really looks spectacular. We've actually shown that while the use of docetaxel is consistently associated with a median overall survival of less than one year, we've observed at least doubling of expected median overall survival, especially in non-squamous, non-small cell lung cancer, which is still 2/3 of the patients. It's a very big opportunity where we use a precision medicine approach. We had very poor baseline prognostic factors. It was actually a very bad group. These patients had failed multiple lines of treatment. We are not aware of any data in the pipeline of the industry that come even close to it.
If people go to our website, they will find our virtual R&D that we did at the end of last year, where people like Roy Herbst, Charu Aggarwal, Daniel Sterman, who are key leaders in this field, give their external perspective on these data, which are extremely strong. We powered the study with a 90% power. It's going to be global phase III clinical trial, randomized in about 500 patients, that we will start very shortly, where we will randomize patients to receive either KEYTRUDA that they failed on, but we just add 2 administration of aglatimagene, or they stop the KEYTRUDA, as they would do in normal clinical practice, and we give them docetaxel, and then we look at the primary endpoint, which is, in this case, end-stage progressive disease, of course, overall survival. It's quite easy to administer this.
This is done by the pulmonary physicians by bronchoscopy in an outpatient setting. Takes 45 minutes. It's well-tolerated. These patients underwent already bronchoscopy because that's how you establish the diagnosis, right? You take the biopsies. You only do it twice in a patient's life. In fact, this is, again, very aligned with normal clinical practice. Nothing difficult about the administration. Aligned with how these physicians actually treat the patients.
All right. Well, that's all we have for time. Paul Peter, really appreciate it.
Peter, thank you so much.
Thank you everyone for listening.
Thank you very much. It was a pleasure.