Okay. Thanks everyone for joining us. This is the Fireside Chat with Lyell. My name is Vikram Purohit. I'm one of the biotech analysts with the Morgan Stanley Research team. Before we get started, I need to read a brief disclosure statement. For important disclosures, please see the Morgan Stanley disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, very happy to have with me, Lynn Seely from Lyell. Lynn, thanks for joining us.
Thank you. Thanks for having us.
Sure. So there's quite a few programs in your pipeline that I think is important to touch on, but before we do that, maybe you can just start us off with some opening remarks on kind of the foundational science and technology underpinning Lyell's platform, and then we'll go from there.
Sure, absolutely. Well, Lyell is a cell therapy company focused on solid tumors, and we have two programs in the clinic today, one in CAR T-cell therapy and the other in tumor-infiltrating lymphocytes. I think arguably, one of the greatest advances in medicine in the last decade has been this ability to use living cells to treat and even sometimes cure patients with cancer. The problem has been that most of that advance has been in hematologic malignancies or blood cancers. The fact of the matter is, 90% of cancer deaths come in solid tumors, and so Lyell has really chosen to focus on solid tumors. It really came to be because of a very important clinical experiment that was done at the Fred Hutchinson Cancer Center. What they did was quite elegant. They took a ROR1-targeted CAR T construct.
They expanded cells from a patient with chronic or several patients with chronic lymphocytic leukemia and showed that, just as you might expect, it worked beautifully, the cells expanded, and the tumor regressed. They took exactly the same ROR1 construct and gave it to patients with solid tumors, triple-negative breast cancer and non-small cell lung cancer that expressed ROR1, and something very different happened. The cells, after infusion, rapidly upregulated markers of exhaustion. And so for the first time in the clinic, we learned that T cell exhaustion was a major barrier to developing new cell therapies for solid tumors. And so Lyell set out, to overcome that, and right at that same time, there was some elegant work going on at Stanford.
We have sort of been able to accumulate a variety of technologies to allow us to address two main problems: getting T cells to resist exhaustion and then also to have durable stemness, this ability to self-renew over time. We currently have these two programs in the clinic, which are really targeted. They're actively recruiting and enrolling, and the CAR T program, as well as the TIL program, are geared to those exact same principles. To achieve this, we have four technologies that we have disclosed to date, and these we call our platform technologies because they can actually be applied to any T cell program, whether it's a CAR, TIL or a TCR. The first one is what we call c-Jun overexpression. This was developed in Dr. Crystal Mackall's lab at Stanford.
She's the founder of the Cell Therapy Cancer Center at Stanford, and a postdoc in her lab, Dr. Rachel Lynn, who now works at Lyell, published a very important paper in Nature, where she showed that if you overexpress c-Jun in T cells, they can resist exhaustion and bring benefit across a wide variety of tumor models. And so this, the reason it works is because it modulates the AP-1 transcription factor pathway, which is what leads to exhaustion. So that's our first technology, c-Jun overexpression. She has continued, and her team have continued to innovate, and we now are coupling that with a second technology, NR4A3 knockout, which we do with CRISPR-Cas9. And what that does is it basically, it further regulates the AP-1 transcription factor pathway. It's a negative regulator of that pathway.
So you can think of c-Jun overexpression as stepping on the gas to stimulate the T cells, and then NR4A3 knockout removes that negative regulator. So those are two genetic reprogramming technologies we have. We then have two ways that we're generating T cells with better stem-like features and persistence. One of those is known as Epi-R, which is a novel manufacturing protocol we have in the way that we expand our T cells. And we put this in all of our programs because it leads to T cells which persist longer, have better cell killing capabilities. And then our newest technology we call Stim-R. It's sort of a remarkable advance in a field that has been a little bit stagnant in quite some time.
For decades, people have been activating T cells using TransAct or Dynabeads, which are sort of a very unnatural way to activate T cells. Well, we have a new technology with these very small micro rods, if you will, that are lipid-coated, and they activate the T cells in a very natural, physiologic way. And consistently, wherever we do this, we get much better qualities of the T cells. And so we're about to start a new clinical program in the first half of next year, which will incorporate all four of our technologies. So we have platform technologies, which we're then taking into clinical programs, and we're very excited about that.
Great. Great. I think that's a good, a good introduction from, from which we can kind of discuss some, some details about the pipeline programs here. But, before we do that, I wanted to touch on a release from this morning. You issued some news about Cellares and a manufacturing agreement. Could you kind of walk us through what all that means for your platform?
Sure. So we announced today that we've established a new partnership with Cellares. Cellares is an integrated development and manufacturing organization, which is really looking to develop scalable, automated manufacturing for cell therapies and CAR T-cell therapies in particular. And I think Lyell is known for very strong science. We're in the clinic on two programs, but we all know a major barrier to success in the field is, in fact, scalable, cost-effective manufacturing. And so this is a proof of principle partnership, and we're very excited about it. With a single automated Cell Shuttle , they can make 800 doses of LYL797 in a year at much less cost than we can at our current Lyell facility, where we're manufacturing our clinical product.
Because you don't have the labor cost, you don't have so much overhead for the facility. So we think it's. We've been watching this company for quite some time and been really impressed with their progress.
Great. Great. Let's then talk about 797 and 119, both ROR1 targeting CAR T products. I guess question one, give us a sense of how broadly is ROR1 expressed across different tumor types, and how preferentially is it expressed on tumor cells versus healthy cells?
Sure. It's a great, great question. Well, we and others believe ROR1 is a great target. It is expressed on several different tumor types, triple-negative breast cancer, non-small cell lung cancer, ovarian cancer, and some hematologic malignancies as well, such as chronic lymphocytic leukemia, DLBCL, et cetera. So it's a broadly expressed marker. What it does exactly, it's an embryo fetal protein that is really expressed most normally in normal tissues early in life, probably for cell migration, cell polarity, but the cancer sort of co-opts it. There may be some low-level expression in things like the parathyroid, pancreas cells, but in general, several people have been developing, several companies have been developing ROR1-targeted therapies.
We haven't seen on-target, off-tumor toxicity, meaning that it seems to be, whether it's an antibody drug conjugate or a cell therapy, directed to the tumor and not to normal tissues, causing toxicity. So, expression in cancer in a variety of large cancers, it is important to note that that expression does correlate with poor prognosis, so it's not just sort of a bystander. It seems to be leading to a poor prognosis for those cancer patients. And so we are a believer that this is a, a very, a very good target. Today, I can tell you, that we're have been giving some data for the first time about our ROR1 screening program, because you can read the literature to see how widely expressed ROR1 is, but what really matters is how we can detect it.
So we developed our own assay. We have a really great antibody, and we even have reported today that in 77 patients with triple-negative breast cancer, 53% were ROR1 positive, which matches very nicely what is in the literature. In non-small cell lung cancer, which we all know is a nice sized market, we have 33% of patients testing positive for ROR1, and so again, very consistent with what was expected based upon the literature, so we're very pleased with that data.
Got it. Could you maybe take us through the basic construct of LYL797, and what are some of the key points of preclinical data you saw that gave you conviction that they should move into clinical evaluation?
Sure. So our ROR1 construct, we have the ROR1 CAR, and then we also overexpress c-Jun. And so the ROR1 CAR basically targets to the cancer, but as we've talked about, if the T cell doesn't function when it gets there, it doesn't matter. And so the c-Jun overexpression is there to help the T cell resist exhaustion, and that allows it to infiltrate the tumor better and to continue cell killing over time, which is critically important. We actually expand our T cells in something we call our Epi-R protocol, and so it helps us to get the number of T cells that we need with the right stem-like features, again, this ability to persist over time and to self-renew.
And then finally, we do have an EGFR tag, which allows us. It is a safety switch, but it is also can be very useful in tracking the CAR T-cells so that we can watch them in the peripheral blood and do CAR T PK, for example, and so it helps us understand the expansion and the persistence of those T cells. So it enables a very robust translational program, as well.
Got it. Got it. So on the topic of the phase I study that's currently underway, could you just remind us of some of the key design features, the kinds of patients being enrolled? And then we'll talk about your expectations for next year.
Sure. So as I said, we're actively enrolling our phase 1 clinical trial with a ROR1 CAR T. We are, It's a design which has dose escalation as well as dose expansion, and we're recruiting patients with triple-negative breast cancer, relapsed refractory, so these are women who have failed other available lines of therapy, and then also patients with non-small cell lung cancer, so dose escalation and then dose expansion.
Got it. And then for the data update expected in the first half of next year, just guide us in terms of how many patients of data can we expect to see, how much follow-up could it be, and what you're looking for there to be able to establish that things are going in the right direction?
Sure. So I'm very pleased to announce, as I said, we're actively recruiting at a number of centers across the United States, 16. We're recruiting ROR1-positive patients, so that's an important to note, and we're guiding that we will be presenting data from at least 20 patients in the first half next year, the majority of which will be triple-negative breast cancer patients, since that's where we started for dose escalation. So we're really excited about the progress of that program. As you might imagine, there's gonna be a range of durability, so these are gonna be initial data.
The data will continue to mature, but we are hoping to give investors a feel for the profile of the product, so enough durability so that at least they can see that we're getting that kind of T cell persistence that we talked about.
Got it. And when you think about the risks to seeing kind of a strong outcome with this data set, what are some of the... maybe one or two of the key risks that you see, whether it's on the mechanistic side or whether it's on the trial design side or the patient selection side? Because what if you had to pick one or two key concerns with the outcome, what would those be?
Yeah. Well, let me, let me come back to, to one of your earlier questions that maybe I didn't fully address. And, and the reason we go into this clinical trial with such confidence is because of the strength of the scientific group at Lyell. And I, I alluded to it before, but when Lyell brings in technology, they don't just bring in intellectual property, they bring in the scientific innovators along with it. And so we have really, really strong science, and our scientists don't just throw up a single experiment and say, "Oh, good, let's take this into the clinic." They make sure that we have prosecuted the science as to the greatest depth that it can. And so let me just give you an example with the ROR1 CAR T-cell program. You know, so what are, what are some of the reasons these programs fail?
You don't get the persistence that you wanted. The T cells don't expand, and they don't persist long enough. You don't get the right tumor infiltration that you need, and so you can't get the type of tumor shrinkage that you have. Well, there are a lot of models out there. We've done most of them at Lyell, but one in particular, which is a syngeneic mouse model, it's known as the KP mouse model. It's got some very specific tumor drivers and an intact immune system, and so it most beautifully recapitulates human non-small cell lung cancer. In fact, if you look at it under the microscope, it's very hard to distinguish. It is a notoriously aggressive model. Chemotherapy doesn't work well with it. The checkpoint inhibitors don't work well.
Our scientists decided that this is where we would test our CAR T-cell program. In fact, what they were able to show is that we get very nice cytokine levels indicating cell killing. We get very nice tumor infiltration, and a lot of people don't appreciate that. But if in fact, your T cells resist exhaustion, that's gonna lead to better tumor cell infiltration, which is, or the tumor infiltration of the T cells, which is exactly what we're gonna need to get the right cell killing. And 50% of the tumors had control or regression in this model, which, again, is fantastic. And if we could see something similar in human lung cancer, that would be great.
Very less aggressive tumor models we've sort of tested across the board and also this very aggressive non-small cell lung cancer model.
Got it. Okay, that's helpful. So for 119, could you talk us through how the structure of or the construct of that, CAR T is different from 797?
Yeah, so we talked earlier about having these four stackable technologies.
Yep.
So 797 has c-Jun overexpression. 119 has c-Jun overexpression and NR4A3 knockout, so two ways to regulate the AP-1 pathway and help the T cells resist exhaustion. In addition, it has Epi-R like 797, but also it is now manufactured with Stim-R, which is this novel manufacturing method that we have and as we were describing earlier, and we see consistently better results because the T cells are being activated in a much more physiologic way. And so Lyell 119 is what I'm gonna call the next generation. It is still ROR1 targeted. We're doubling down. We're big believers in ROR1 as a target, but it is now even more potent and we believe having more durability and persistence.
When you start the phase 1 study with 119, do you think it's going to enroll similar tumor types or the same tumor types as 797 or a different set?
It's a, it's a great question because they both are ROR1 targeted. We talked about there are a number of tumor types that express ROR1, so we have choices. We are a data-driven company, both scientifically, clinically, and translationally, and so we will make the decision based upon the data. But what I can tell you, it's reasonable to expect to see some new tumor types as well as at least one overlapping one, and non-small cell lung cancer might be a good example. It's a very large market.
Got it. Understood. So I'll ask you this next question, keeping in mind your, your comment just now that you're data-driven and you will let, you'll let the data kind of drive your decisions. But in looking forward, are you looking to prioritize one of these CAR T constructs over another, or do you think there's space in the pipeline for two in two separate tumor types, if that's where-
Oh.
-data goes?
So it's also a great question. Right now, we'll be moving them forward together. I think the data will help us decide. You know, we are all about getting products approved for patients, and you know, we're gonna do that as quickly as we can. If there's room for two, based upon two indications or multiple indications, as you say, that's possibly what we'll do. If one is far superior or better than the other, then we may make that switch. For right now, we're moving them forward, and we do believe there is room for both, because of, you might imagine, for example, that there are things like ovarian cancer, pancreatic cancer, that might be harder to approach, and an even more potent cell therapy might be good in those indications. So stay tuned.
We'll wait and see as the data develop, but right now we're moving them both forward.
Got it. Okay, great. We have roughly 10 minutes left. Maybe this is a good time to pivot to 845.
Sure.
First question, basic question: How is 845 distinct from a traditional TIL product?
Well, I think in several ways. So I think when it's important to note that some of our founding team members came from the NCI, where a lot of the original work has been done, and we know TIL have been around for a long time. And one of the things that has been reported in the literature is a very careful retrospective look at those patients who responded to TIL therapy from the National Cancer Institute. And so what they were able to show is that the patients' cell products, of those patients who responded, had, yes, cytotoxic T cells, but they also had a large number of stem-like T cells. And so there are certain markers that you look for in the T cells that can help identify the stem-like cells, the ones that are more likely to self-renew.
And so we developed a process very intentionally to bring more of those stem-like cells reliably and reproducibly into our process, and we call this our Epi-R manufacturing protocol. We use it in all of our programs, but it's especially important in our TIL program. And what it allows us to do is take from the tumor cell, to harvest the TIL, and take them from millions of cells into billions of cells. And when you do that, three things are very important. You have to have the right cell number, of course, number matters, but you have to have the right phenotype of the cells. So you have to have the right mix of those cells that are ready now to kill, but also cells that have the right stem-like features that can then persist, self-renew over time.
We've been able to show, for example, there's a marker known as double - 39, -69 T cells, and we can show substantially increase in those over the standard prep reliably and reproducibly. So that's one thing that's important. The other thing that's important is that we have substantial polyclonal. There are a lot of when you harvest T cells from the tumor, there are different types of them, but only some of them are the tumor-reactive ones, the ones that are going to kill. And so when you grow again from millions to billions, you've got to make sure those tumor-reactive clones are growing up.
We've looked in a very scientifically detailed way, using sophisticated bioinformatics, to show that in our clinical scale product from melanoma, colorectal cancer, non-small cell lung cancer patients, that we are preserving 94% of the tumor, predicted tumor reactive clones. So we believe our process is advanced, it's different, and it brings us the ability to make the right number, phenotype, and polyclonal of the TIL, not only from advanced melanoma, but also from non-small cell lung cancer and classically cold tumors like colorectal cancer.
Got it. Got it. So with regards to the phase 1 study currently underway, how is that progressing? How's enrollment there going?
It's progressing very nicely. We're really pleased with the progress that we've made to date. We have more than 10 sites up and actively recruiting, and so we're very happy with the momentum. We'll be having clinical data from that program next year as well.
Would you expect that to be only melanoma, or could it be additional tumor types?
I think you can. We're starting with melanoma, but you can expect to see other tumor types next year as well.
Got it. And then I guess the same question here then, that I asked you for the 797 update.
How are you setting your expectations, and how would you guide all of us to set our expectations for what should be considered a clinically meaningful outcome for this data when it comes out next year?
Sure. Well, I think, as I said before, we are about getting products approved, and these are very relapsed refractory patients.
Even with advanced melanoma, of course, the bar has been set by Iovance in some way. These will be smaller patient numbers, so you can't compare apples to apples. We're looking to have data that tells us we want to move both programs ahead into pivotal trials. And I think that, you know, we'll see what the data show. We're super excited based upon our preclinical data about the promise of our TIL program. And I might just throw in, we've been discussing today some new in vivo data that we have in a novel mouse model that our scientists have developed. Really, it's quite unusual. You don't see this typically, but we've been able to show in a mouse that has melanoma.
Basically, we've made a mouse with a modified melanoma cell line and that we take TIL from a donor, two different donors, for example, split the samples and make TIL from the standard process, the NCI process or our Epi-R process, match the cell number and then give the mice TIL. And what we're able to consistently show when you match cell numbers is that the Epi-R process dramatically and controls the tumor growth, keeps basically shuts down the tumor growth, while you see the standard protocol, it's better than no treatment at all, but the tumors continue to grow in the mice. So we think in multiple different ways, scientifically, we've shown promise for this. So the bar will be what it takes to get the drug, the TIL, approved. But we know that immunotherapy, we all have the goal of moving this upstream earlier-
because that's when, you know, when patients are very relapsed or refractory, have been through a lot of lines of treatment, It's harder to see the benefit, that as you move earlier. So we're, we're extremely excited about both of our programs, actually.
Got it. So with the second-generation TIL, can we just unpack in a little bit more detail, how is that distinct versus 845? Sorry if you just mentioned this, and I kind of-
No, no, no. So, we have the first thing I want to say is that we do have a new manufacturing process for our TIL, which we're going to be moving into the clinic next year, which decreases the time to manufacture from 24 to 16 days. So a substantial advantage, and so that's a new manufacturing protocol. What you're referring to is our next generation pipeline product, where we're going to be combining our Epi-R technology with genetic reprogramming, and so actually having a genetic reprogrammed TIL, we're not disclosing yet what the targets are. This is to be a broadly, it's not to target a specific tumor type, but a broad TIL, which we believe is going to have even greater promise, much the way you see the second-generation ROR1 CAR T-cell program coming.
So you'll be hearing more about that, moving forward, but I can tell you our scientists are really excellent. I've looked at a variety of ways to enhance the TIL and believe we've come up with something very special.
Got it.
So, more to come on that.
Got it. Got it. Understood. Maybe then we can take a step back from the pipeline and just kind of focus on the business, business more broadly. Over the next 1-2 years, do you expect to kind of ramp up your, like, internal R&D productivity efforts further and nominate new programs? Or should we think of the business currently as kind of in an execution phase with the 4 programs that you've currently laid out?
So I would say both. Lyell is in a very fortunate position in that we have a nice cash balance sheet, so we have $633 million in cash. And this allows us to get our runway well into comfortably into 2026, so we can turn over our clinical cards and see what we have, as well as continuing to invest very strategically in our pipeline progression. And so I think Lyell is beautifully situated. As I said, we have these two cell therapy program types. We have the CAR T program, which is very different than the TIL program, both with multiple indications in clinical trials, which will go straight to pivotal if we see that right proof of concept.
We have four platform technologies, which, again, we're using them in our CAR program or our TIL program or both, but they can be. If proof of concept is there, they can be used in any CAR program. That's the idea of getting the T-cell function right, because then it doesn't matter what the target is, whether it's a CAR or TCR, people are going to want the types of technology that we have to make the T-cells function well. So I think we're in a really strong position. We continue to be focused, of course, on our programs in the clinic and continuing the acceleration of our execution, but then also allowing our scientists to shine and continue to create new value.
Got it. And, what is your appetite towards BD and partnerships, across your current pipeline? And it's really two questions there. When could partnerships make sense if they're of interest to you? And then secondly, what would you be looking to bring in from a partnership besides just capital? What would be additive?
So great questions. The best thing I can say is that we have a very nice balance sheet, and so we have no need to take on a partnership unless it was unbelievably compelling.
Many times people have to do CAR partnerships that are less than ideal because of their cash position. We're very fortunate not to be in that position. So I would say there would have to be something very compelling about it. I think you know that we have our own manufacturing facility, and so we are able to manufacture our clinical product there. We will be needing commercial, additional commercial manufacturing for the indications that we're in. So with respect to partnering, we have wholly owned programs. We don't need to partner anytime in the near future, but if the opportunity is right, of course, we're going to be open to that.
With respect to augmenting our own pipeline, I think very bullish, in case you can't tell on the science, the depth of the science that we have, but we're always on the lookout for something that, right, might mix in nicely with what we already have. So we are open, but basically, I think we're in a very strong position where we are right now, and we plan to add value to grow that pie even bigger than it is today.
Got it. Okay, I think that's a great place to close out the session. Thank you so much for joining us.
Thank you.
We really appreciate your time, and let's go ahead and call it there.
All right.
Thank you very much.