Precision BioSciences(DTIL) - 2024 Q4 - Annual Report

Gene Editing Technology - The ARCUS platform is a novel gene editing technology that utilizes a homing endonuclease, offering a unique cut that drives defined therapeutic outcomes [20]. - PBGENE-HBV, the lead program, aims to eliminate cccDNA in chronic hepatitis B patients, with the first patient dosed in December 2024 and a substantial reduction in HBsAg observed in two of three participants [30][31]. - PBGENE-3243 targets m.3243 associated mitochondrial disease, affecting approximately 20,000 people in the U.S., with plans to submit an IND application in 2025 [33]. - Preclinical data showed ARCUS achieved over 85% gene insertion efficiency in T-cells and 39% in non-dividing primary human hepatocytes [34]. - PBGENE-DMD demonstrated significant improvement in functional effects in DMD-diseased mice, with the ability to edit Pax7+ cells [36]. - PBGENE-LIVER achieved 40% to 45% overall gene insertion efficiency in non-dividing cells in nonhuman primates [37]. Collaborations and Agreements - The Novartis Agreement involves developing a custom ARCUS nuclease for treating hemoglobinopathies, with Novartis responsible for subsequent development and commercialization [38]. - A license agreement with Caribou Biosciences includes upfront payments and royalties on net sales, enhancing the company's collaboration strategy [43]. - On August 15, 2023, Imugene US acquired the manufacturing infrastructure for azer-cel, including clinical trial inventory and related assets, as part of the asset purchase agreement [45]. - The Imugene License Agreement grants Imugene US exclusive and non-exclusive rights to develop and commercialize azer-cel and up to three additional research product candidates [46]. - The Novartis Agreement, effective June 15, 2022, focuses on developing in vivo gene editing products for hemoglobinopathies, including sickle cell disease and beta thalassemia [47]. - Novartis will assume responsibility for all subsequent development, manufacturing, and commercialization activities for the licensed products developed from the ARCUS nuclease [48]. - The Duke License includes milestone payments totaling $0.3 million and low single-digit percentage royalties on net sales of licensed products [52]. Intellectual Property and Patents - The company holds an exclusive license from Duke under 12 issued U.S. patents and two pending U.S. patent applications as of December 31, 2024 [62]. - The patent portfolio includes 45 issued U.S. patents and 46 pending non-provisional U.S. patent applications, with a focus on obtaining additional patent protection for ARCUS technologies [62]. - The company relies on a combination of patents, trade secrets, and licensing agreements to protect its intellectual property and maintain a competitive edge in the market [60]. - The first patent family includes 12 issued patents in the United States, 6 in Europe, 3 in Japan, and 1 each in Australia and Canada, with a standard expiration date of October 18, 2026 [64]. - The second patent family includes 4 issued patents in the United States, 3 in Europe, 2 in Japan, and 1 in Australia, with a standard expiration date of October 31, 2028 [65]. - The third patent family includes 3 issued patents in the United States and 2 each in Europe and Australia, with a standard expiration date of July 14, 2029 [66]. - The fourth patent family has pending applications in multiple countries, with a potential expiration date of May 7, 2040 [67]. - The company owns 30 patent families related to in vivo gene editing technologies, protecting its product candidates [69]. Regulatory and Compliance - The FDA requires the submission of an IND before initiating clinical trials, which becomes effective 30 days after receipt unless safety concerns arise [129]. - Human clinical trials must follow protocols that establish safety, purity, potency, or effectiveness of the proposed biologic product candidate [131]. - The BLA submission includes all relevant data from preclinical and clinical studies, and the FDA aims to review standard applications within 10 months or 6 months for priority reviews [140]. - The FDA may issue a Complete Response Letter (CRL) if the BLA submission is found unacceptable, outlining deficiencies and requesting additional information [141]. - Approval of a product may be granted for specific indications and may require a Risk Evaluation and Mitigation Strategy (REMS) to manage known risks [142]. - The Pediatric Research Equity Act (PREA) mandates pediatric clinical trials for most biologics unless a deferral or waiver is granted [143]. - Fast track designation allows for expedited review of products intended to treat serious conditions and may involve rolling review of the BLA [145]. - Breakthrough therapy designation provides intensive FDA interaction and guidance starting as early as Phase 1 for products showing substantial improvement over existing therapies [146]. - Accelerated approval may be granted based on surrogate endpoints, with confirmatory trials required to verify clinical benefit [147]. - The FDA may withdraw approval of a drug if confirmatory trials fail to verify predicted clinical benefits or if the sponsor does not conduct trials timely [147]. - The Regenerative Medicine Advanced Therapy (RMAT) designation allows for expedited development and review of drugs intended to treat serious or life-threatening diseases, with potential benefits including more frequent FDA meetings and eligibility for accelerated approval [148]. - Orphan Drug Designation can be granted for drugs intended to treat rare diseases affecting fewer than 200,000 individuals in the U.S., providing benefits such as tax credits and a seven-year exclusivity period upon first FDA approval [150][152]. Market and Industry Dynamics - The company competes with major biotechnology firms and academic institutions in the gene editing and therapy sectors, facing significant competition in research and development capabilities [57]. - The ACA has significantly changed healthcare financing and delivery, with ongoing scrutiny over pharmaceutical pricing practices [4]. - The Inflation Reduction Act of 2022 mandates price negotiations for certain drugs starting in 2026, with potential significant impacts on the pharmaceutical industry [4]. - The U.S. federal Anti-Kickback Statute prohibits remuneration to induce purchases of items reimbursable under federal healthcare programs [5]. - The U.S. civil False Claims Act prohibits knowingly presenting false claims for payment to the federal government [6]. - Compliance with healthcare laws involves substantial costs and potential penalties for violations, including exclusion from Medicare and Medicaid programs [7]. Workforce and Culture - The company has a team of 27 full-time employees with Ph.D. or M.D. degrees, emphasizing strong scientific experience in gene therapies [42]. - The organization emphasizes a culture of innovation, accountability, respect, adaptability, and perseverance, aiming to empower employees to deliver meaningful work [218]. - As of December 31, 2024, the workforce was approximately 51% female and 24% from diverse racial backgrounds, with senior leadership being approximately 33% female and 24% Asian or Black [220].