Gracell Biotechnologies(GRCL) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - As of September 30, 2023, the company had RMB1,707.9 million or US$234.1 million in cash and cash equivalents and short-term investments, with an expected cash use of approximately US$100 million for the year primarily for R&D and clinical programs in the U.S. and China [26][22] - The net loss attributable to ordinary shareholders for the three months ended September 30, 2023, was RMB67.6 million or US$9.3 million, a decrease from RMB171.9 million in the prior year period, primarily due to a decrease in the fair value of warrant liabilities [27] - Research and development expenses for the same period were RMB90.1 million or US$12.3 million, down from RMB133.4 million in the prior year, attributed to decreased spending on research and clinical trials [27] Business Line Data and Key Metrics Changes - The company initiated patient dosing in its first U.S. trial for the BCMA-CD19 dual targeting FasTCAR GC012F in relapsed refractory multiple myeloma, with one clinical site currently recruiting patients and plans to activate additional sites [9] - In China, patient enrollment for the Phase 1/2 IND study in relapsed refractory multiple myeloma is expected to commence this quarter, following the receipt of all required approvals [10] - Clinical data from an ongoing Phase 1 IIT evaluating GC012F as a frontline treatment for high-risk newly diagnosed multiple myeloma showed a 100% overall response rate and 100% minimal residual disease-negative stringent complete response rate among 19 patients [24] Market Data and Key Metrics Changes - The company is expanding its CAR-T therapy applications beyond hematological cancers to address unmet needs in autoimmune diseases and solid tumors, indicating a strategic shift in market focus [8] - The company is also advancing its SMART CART technology for solid tumors, with preclinical data presented showing enhanced efficacy compared to conventional CAR-T [20] Company Strategy and Development Direction - The company aims to push the boundaries of cancer treatment through innovative CAR-T therapies, focusing on rapid manufacturing, safety, and durable responses [7] - The strategic pipeline alignment has led to the suspension of the Phase 2 trial for GC007g due to limited commercial opportunity, allowing the company to concentrate resources on potentially best-in-class programs [21] - The company plans to submit IND filings in the U.S. and China for the planned Phase 1 clinical trial in refractory systemic lupus erythematosus (rSLE) this year [19][75] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the safety and efficacy of GC012F, highlighting its favorable safety profile with no neurotoxicity observed in 60 patients treated [11] - The company anticipates releasing the first public readout from the ongoing IIT in SLE in the first half of 2024, with expectations of double-digit patient evaluations [18] - Management emphasized the importance of safety in CAR-T therapies as the company explores applications in autoimmune conditions, where safety standards are particularly high [12] Other Important Information - The company completed a private placement transaction in August 2023, raising $100 million upfront and up to $50 million in additional funds, extending its cash runway into the second half of 2026 [22] - The company is actively engaging in conversations with potential partners interested in both oncology and immunology [66] Q&A Session Summary Question: Can you provide more color on the percent of antibody secreting cells that may be CD19 negative? - Management acknowledged that while the exact percentage of CD19 negative ASC is not well-documented, it is known that such cells exist and are BCMA positive [31] Question: Can you quantify the B-cell antibody suppression seen with the dual construct versus CD19 CAR-T alone? - Management indicated that the dual construct showed more than a 10-fold increase in B-cell antibody suppression compared to the CD19 single CAR-T [33] Question: What type of data is the company planning to release in the first half of '24 for the SLE study? - Management expects to present data from double-digit patients, with most having at least three months of follow-up [45] Question: What is the regulatory path for the newly diagnosed multiple myeloma study? - Management stated that it is too early to define the study design for newly diagnosed patients but emphasized the importance of safety and efficacy in discussions with the FDA [41] Question: What is the expected duration of B-cell depletion in SLE patients? - Management noted that the duration of B-cell depletion is similar to that seen in multiple myeloma, but more time is needed to draw definitive conclusions [48] Question: Will there be additional translational work presented at the upcoming summit? - Management indicated that the data presented at the summit will be similar to what has already been shared, with no significant new information expected [68]