Vor(VOR) - 2020 Q4 - Annual Report

PART I Business Vor Biopharma is a cell therapy company developing engineered hematopoietic stem cells (eHSCs) to make patients' healthy cells resistant to targeted cancer therapies, thereby reducing on-target toxicity and enhancing treatment efficacy Overview and Pipeline Vor Biopharma focuses on hematological malignancies, using patient engineering to make healthy cells resistant to targeted therapies, with lead product VOR33, an engineered hematopoietic stem cell for AML, entering Phase 1/2a trials - The company's core strategy is to genetically modify hematopoietic stem cells (HSCs) to remove surface targets (creating eHSCs), making healthy blood cells resistant to targeted cancer therapies and thus limiting on-target toxicity[17][19] - The lead eHSC product candidate, VOR33, has the CD33 surface target removed. An IND application was accepted by the FDA in January 2021, with a Phase 1/2a trial in combination with Mylotarg planned to start in Q2 2021[20][21] - VCAR33, a CAR-T therapy targeting CD33, is being developed as a bridge-to-transplant monotherapy for AML and as a companion therapeutic for VOR33. An IND for the VOR33/VCAR33 Treatment System is planned for the second half of 2022[22][23] Vor Biopharma Pipeline and Anticipated Milestones | Program | Modality | Indication | Status | Anticipated Milestones | | :--- | :--- | :--- | :--- | :--- | | VOR33 (CD33) | eHSC | AML (with Mylotarg) | Phase 1/2 | Q2 2021: First patient enrolled
Late 2021/1H 2022: Initial engraftment and protection data | | VCAR33 (CD33) | CAR-T | Bridge-to-transplant AML | Phase 1/2 (NMDP-sponsored) | 2022: Initial monotherapy clinical proof-of-concept data | | VOR33/VCAR33 Treatment System | eHSC/CAR-T | AML | Preclinical | 2H 2022: IND filing | | Discovery Programs | Vor Platform | - | Discovery | Identifying additional targets (CD123, CLL-1) and multiplex engineering approaches | Our Programs The company's programs develop eHSCs by removing non-essential surface targets from donor HSCs to enable potent companion therapies, initially focusing on AML with VOR33 and VCAR33, and extending to other targets like CD123 and CLL-1 - VOR33 is an eHSC product candidate where the CD33 surface target is genetically removed from donor HSCs. This is intended to protect patients from the on-target toxicity of CD33-directed therapies like Mylotarg or VCAR33[55][73] - Preclinical studies showed that CD33-deleted (CD33Del) cells had an approximately 70-fold increase in IC50 (resistance) to Mylotarg compared to wild-type cells and that removal of CD33 did not negatively impact HSC differentiation or immune function[77][84][85] - VCAR33 is a CAR-T therapy targeting CD33, licensed from the NIH. It is being developed as a monotherapy for relapsed/refractory AML (bridge-to-transplant) and as a companion therapeutic for VOR33 in the VOR33/VCAR33 Treatment System[74][108] - The company is advancing preclinical programs to create eHSCs with other targets removed, such as CD123 and CLL-1, both individually and in multiplexed combinations with CD33, to address other hematologic malignancies and potential tumor escape mechanisms[124][147] Commercial Strategy, Manufacturing, and Competition The commercial strategy leverages existing HSCT centers and favorable reimbursement, while manufacturing relies on CMOs with plans for in-house capabilities, facing intense competition from eHSC and CD33-targeted therapy developers - The commercialization strategy targets the approximately 12,000 annual allogeneic HSCTs performed globally, leveraging the concentrated network of specialized transplant centers[156][157] - The company anticipates favorable reimbursement pathways, including a Medicare carve-out for stem cell acquisition costs effective October 1, 2020, and a new MS-DRG base payment rate of approximately $240,000 for CAR-T cases effective January 1, 2021[159] - Vor currently relies on third-party contract manufacturers for materials and products but is planning to develop in-house manufacturing capabilities to support its clinical trials[174] - Key competition includes Tmunity Therapeutics (licensed eHSC technology from UPenn), companies with CD33-directed therapies like Johnson & Johnson and Amgen, and numerous approved AML treatments from companies like Novartis, Pfizer, and AbbVie[177][178][179] Intellectual Property The company secures patent protection for its product candidates, methods, and technologies, with key licenses from Columbia University for VOR33 and NIH for VCAR33, and also owns multiple patent families for engineering specific antigens and CAR technologies - The patent portfolio for the lead eHSC product, VOR33, includes three patent families exclusively licensed from Columbia University, with expected expiration dates in 2036, 2038, and 2040[187][188][189] - The VCAR33 program is protected by a patent family exclusively licensed from the NIH related to CARs targeting CD33, with an expected expiration date in 2039[195] - The company owns several patent families directed at engineering specific antigens in HSCs, including CD33, CLL-1, and CD123, as well as compositions and methods for making and using CARs[191][194] Government Regulation Vor Biopharma is subject to extensive FDA and global regulation, with cell therapy products regulated as biologics requiring BLA approval after preclinical and multi-phase clinical trials, and ongoing compliance with cGMP, labeling, and healthcare laws - The company's cell product candidates are regulated as biologics and are considered "more than minimally manipulated," requiring clinical trials and an approved Biologics License Application (BLA) before marketing[205] - The U.S. product development process involves preclinical testing (GLP), submitting an IND, performing clinical trials (GCP) in three phases, and obtaining FDA approval of a BLA after demonstrating safety, purity, and potency[207][208][215] - The company may utilize expedited programs such as Fast Track, Breakthrough Therapy, Accelerated Approval, and Priority Review to facilitate the development and review of its product candidates[230][233] - Approved biologics in the U.S. are entitled to a 12-year period of marketing exclusivity under the BPCIA, which prevents the FDA from approving a biosimilar version during that time[244] - The company's operations are subject to various U.S. healthcare laws, including the federal Anti-Kickback Statute, the False Claims Act, HIPAA, and the Physician Payments Sunshine Act, which regulate interactions with healthcare providers and payors[248][249][251] Risk Factors The company faces substantial risks including significant net losses, the need for additional funding, reliance on unproven eHSC technology and lead candidates, intellectual property disputes, dependence on third-party licenses and manufacturers, evolving regulatory pathways, and the impact of the COVID-19 pandemic - The company has a history of significant net losses ($43.3 million in 2020) and expects to incur losses for the foreseeable future, requiring substantial additional funding to continue operations[290][293] - The company's eHSC technology is novel and not yet clinically validated. The approach is unproven and may never lead to marketable products, facing challenges in regulatory approval, manufacturing, and avoiding potential complications like engraftment failure[311][312] - Success is substantially dependent on the two most advanced candidates, VOR33 and VCAR33. Any failure or delay in their development, approval, or commercialization would significantly harm the business[315] - The company relies on intellectual property licensed from third parties, such as Columbia University for VOR33 and the NIH for VCAR33. Termination of these licenses would result in the loss of significant rights and harm the business[455][457] - The company relies on third parties for manufacturing and clinical trials. This dependence increases risks related to supply sufficiency, quality control (cGMP compliance), and potential delays that are outside the company's direct control[431][439] - The COVID-19 pandemic could disrupt development efforts by delaying clinical trial initiation and enrollment, impacting the supply chain, and causing operational disruptions at regulatory agencies[553][554] Unresolved Staff Comments The company reports no unresolved staff comments - Not applicable[594] Properties The company's principal executive office and laboratory space is located at 100 Cambridgepark Drive, Suite 400, Cambridge, Massachusetts, under a lease for 32,798 square feet that terminates in June 2030 - The company leases 32,798 square feet of office and laboratory space in Cambridge, Massachusetts, with the lease set to terminate in June 2030[595] Legal Proceedings The company is not currently subject to any material legal proceedings - As of the report date, the company is not a party to any material legal proceedings[596] Mine Safety Disclosures This section is not applicable to the company - Not applicable[597] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock began trading on Nasdaq under 'VOR' on February 5, 2021, following its IPO, with approximately 54 holders of record as of March 12, 2021, and no intention to pay cash dividends, having raised approximately $186.3 million net from its IPO - The company's common stock began trading on the Nasdaq Global Select Market under the ticker "VOR" on February 5, 2021[600] - The company has never paid cash dividends and does not anticipate paying any in the foreseeable future, intending to retain earnings for business development[602] - On February 9, 2021, the company closed its IPO, receiving net proceeds of approximately $186.3 million[611][612] Selected Financial Data As a smaller reporting company and an emerging growth company, Vor Biopharma is not required to provide selected financial data - The company is a smaller reporting company and emerging growth company and is not required to provide this information[614] Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported a net loss of $43.3 million in 2020, up from $10.8 million in 2019, driven by increased R&D and G&A expenses, with no revenue generated, and expects current funds, including $186.3 million from its IPO, to support operations into Q1 2023 Comparison of Results of Operations (2020 vs. 2019) | (in thousands) | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Research and development | $31,618 | $6,200 | $25,418 | | General and administrative | $11,748 | $4,217 | $7,531 | | Total operating expenses | $43,366 | $10,417 | $32,949 | | Loss from operations | ($43,366) | ($10,417) | ($32,949) | | Net loss | ($43,337) | ($10,839) | ($32,498) | - Research and development expenses increased by $25.4 million in 2020, primarily due to a $14.9 million increase in external preclinical studies and consulting, and an $8.2 million increase in personnel costs from higher headcount[643] - General and administrative expenses increased by $7.5 million in 2020, driven by a $3.8 million increase in personnel costs, a $2.4 million increase in professional fees (legal and consulting), and a $1.3 million increase in facilities and other expenses[644] - As of December 31, 2020, the company had $48.5 million in cash and cash equivalents. Subsequent financing events in early 2021, including the final Series B tranche ($45.4 million) and the IPO ($186.3 million net), significantly increased liquidity[624][647][648] - The company expects its cash on hand, including proceeds from the IPO and Series B financing, to fund operating expenses and capital requirements into the first quarter of 2023[650] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity on short-term cash and equivalents, which is not expected to be material, with no outstanding debt and minimal foreign currency or inflation exposure - The primary market risk is interest rate sensitivity on cash and cash equivalents. However, due to their short-term maturities, the impact of a 100 basis point change is not expected to be material[686] - The company has no debt outstanding as of December 31, 2020, and therefore has no related interest rate risk[687] - Foreign currency exchange risk is not significant as operations are located in the U.S. and expenses are denominated in U.S. dollars[688] Financial Statements and Supplementary Data This section contains the company's audited consolidated financial statements for fiscal years 2020 and 2019, including the Report of Independent Registered Public Accounting Firm, balance sheets, statements of operations, equity, cash flows, and notes - This item includes the company's audited consolidated financial statements and supplementary data, as indexed on page F-1 of the report[690][843] Changes in and Disagreements With Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[691] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020, with no material changes to internal controls reported, and a management report on internal control over financial reporting is not yet required for this newly public company - Management concluded that as of December 31, 2020, the company's disclosure controls and procedures were effective at the reasonable assurance level[692] - As a newly public company, a management report on internal control over financial reporting is not included in this Annual Report[693] Other Information The company reports no other information - None[695] PART III Directors, Executive Officers and Corporate Governance This section provides information on the company's executive officers and non-employee directors as of March 17, 2021, detailing their backgrounds, the composition of board committees, and the company's adopted Code of Business Conduct and Ethics - The report lists the executive officers, including Robert Ang (CEO), Tirtha Chakraborty (CSO), Nathan Jorgensen (CFO), Sadik Kassim (CTO), and Christopher Slapak (CMO), along with their professional backgrounds[698][700][701] - The non-employee directors are detailed, including Kush Parmar (Chair), Daniella Beckman, David C. Lubner, Sven (Bill) Ante Lundberg, Matthew Patterson, and Joshua Resnick[698][706][707] - The composition of the board's committees (Audit, Compensation, Nominating and Corporate Governance) is outlined, with members identified for each[698][714] Executive Compensation Named executive officers for 2020 included CEO Robert Ang, CSO Tirtha Chakraborty, and CMO Christopher Slapak, with compensation comprising salary, non-equity incentives, and option awards, alongside new executive severance, equity incentive, and employee stock purchase plans adopted in early 2021, and a formal non-employee director compensation policy 2020 Summary Compensation Table | Name and Principal Position | Year | Salary ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Robert Ang, M.B.B.S. | 2020 | 424,173 | 1,619,356 | 211,200 | 500,015 | 2,754,744 | | Tirtha Chakraborty, Ph.D. | 2020 | 298,439 | 718,008 | 111,784 | 2,059 | 1,177,890 | | Christopher Slapak, M.D. | 2020 | 176,846 | 627,356 | 136,800 | 283,344 | 1,224,346 | - In January 2021, the company adopted an Executive Severance and Change in Control Benefits Plan, providing for salary continuation, COBRA payments, and potential bonus payments and equity acceleration upon qualifying terminations[737][738] - The company adopted a new 2021 Equity Incentive Plan and a 2021 Employee Stock Purchase Plan (ESPP), which became effective in February 2021. No further grants will be made under the 2015 Plan[749][769] - A formal non-employee director compensation policy was adopted in January 2021, providing annual cash retainers (e.g., $35,000 base) and initial and annual option grants[783] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of March 12, 2021, RA Capital Healthcare Fund, L.P. was the largest beneficial owner with 30.0% of outstanding shares, while all current executive officers and directors as a group beneficially owned 20.5% of the company's common stock Security Ownership of Greater than 5% Stockholders (as of March 12, 2021) | Name of Beneficial Owner | Percentage of Shares Beneficially Owned | | :--- | :--- | | Entities affiliated with RA Capital Healthcare Fund, L.P. | 30.0% | | Entities affiliated with 5AM Ventures VI, L.P. | 18.0% | | Entities affiliated with FMR, LLC | 10.6% | | PureTech Health LLC | 8.6% | - As of March 12, 2021, all current executive officers and directors as a group beneficially owned 20.5% of the company's common stock[795] Certain Relationships and Related Transactions, and Director Independence The company details related party transactions, including preferred stock financings and IPO participation by major investors, a forgiven promissory note to the CEO, and a consulting agreement with the CMO, while affirming that all directors except the CEO are independent under Nasdaq rules - The company conducted Series A-2 and Series B preferred stock financings with participation from major investors and related parties, including entities affiliated with 5AM Ventures, RA Capital, and PureTech Health[803][808] - In the company's IPO, affiliated funds of RA Capital, 5AM Ventures, and FMR LLC purchased an aggregate of $89.5 million worth of common stock[814] - In September 2019, the company issued a limited recourse promissory note for $497,920 to CEO Robert Ang to facilitate an early exercise of stock options; this note and accrued interest were forgiven in full in October 2020[815] - The Board of Directors has determined that all directors are independent under Nasdaq rules, with the exception of CEO Robert Ang[825] Principal Accounting Fees and Services The company paid its independent registered public accounting firm, Ernst & Young LLP, $870,000 in 2020 and $50,000 in 2019, exclusively for audit services, with the audit committee pre-approving all services Principal Accounting Fees (Ernst & Young LLP) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Audit Fees | $870 | $50 | | Total Fees | $870 | $50 | - The audit committee has adopted policies and procedures for the pre-approval of all audit and non-audit services provided by the independent auditor[829] PART IV Exhibits, Financial Statement Schedules This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K, including corporate governance documents, material contracts, and certifications - This item provides a list of all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and certifications[834][835] Form 10-K Summary The company reports no Form 10-K summary - None[837]