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Edited Transcript of GNCA.OQ earnings conference call or presentation 30-Apr-20 12:30pm GMT

Q1 2020 Genocea Biosciences Inc Earnings Call

Cambridge Jun 23, 2020 (Thomson StreetEvents) -- Edited Transcript of Genocea Biosciences Inc earnings conference call or presentation Thursday, April 30, 2020 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Diantha Duvall

Genocea Biosciences, Inc. - CFO

* Jessica Baker Flechtner

Genocea Biosciences, Inc. - Chief Scientific Officer

* Thomas A. Davis

Genocea Biosciences, Inc. - Chief Medical Officer

* William D. Clark

Genocea Biosciences, Inc. - President, CEO & Director

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Conference Call Participants

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* Benjamin Jay Burnett

Stifel, Nicolaus & Company, Incorporated, Research Division - Associate

* Daina Michelle Graybosch

SVB Leerink LLC, Research Division - MD & Senior Research Analyst

* Gil Joseph Blum

Needham & Company, LLC, Research Division - Analyst

* Joseph Pantginis

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Michael Eric Ulz

Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst

* Daniel Ferry

LifeSci Advisors, LLC - MD & Relationship Manager

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Presentation

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Operator [1]

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Good morning, ladies and gentlemen, and welcome to the Genocea First Quarter 2020 Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Dan Ferry of LifeSci Advisors.

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Daniel Ferry, LifeSci Advisors, LLC - MD & Relationship Manager [2]

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Thank you, operator, and good morning, everyone. Earlier today, we issued a press release that outlines the topics we plan to discuss today. This release is available at genocea.com under the Investors tab.

During the call today, Chip Clark, President and CEO, will provide a brief corporate update and the company's Chief Financial Officer, Diantha Duvall, will review the financial results. After their prepared remarks, we will open up the call for Q&A. And Chip, Diantha, Tom Davis, Genocea's, Chief Medical Officer; and Jessica Flechtner, Genocea's Chief Scientific Officer, will then be available to answer your questions.

Before we begin, I would like to remind everyone that statements made during this conference call relating to Genocea's expected future performance, future business prospects or future events or plans, may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from those forecast due to the impact of many factors beyond the control of Genocea. Genocea expressly disclaims any duty to provide updates to its forward-looking statements, whether as a result of new information, future events or otherwise. Participants are directed to the risk factors set forth in Genocea's 2019 and annual report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission.

It's now my pleasure to pass the call over to Chip.

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [3]

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Thanks, Dan, and thank you all for joining us today. I'm pleased to report that Genocea remains on track with our 2 differentiated clinical-stage programs, GEN-009, our neoantigen vaccine, and GEN-011, our neoantigen cell therapy.

Let me first speak more about GEN-009. Throughout the quarter, we have continued Part B of our Phase I/IIa clinical trial, which tests GEN-009 in combination with standard-of-care checkpoint inhibitor therapy in patients with certain checkpoint-sensitive tumors. We believe that we have attained sufficient enrollment to reach a preliminary conclusion about clinical efficacy. Therefore, we have paused enrollment pending such a signal. We remain on track to provide these results in Q3.

Now let me turn to GEN-011. We intend to file an investigational new drug application, or IND, for GEN-011 later this quarter with preliminary clinical results expected in the first half of 2021. We believe GEN-011 is a potential best-in-class adoptive T cell therapy, targeting an unprecedented breadth of relevant neoantigen, avoiding unwanted expansion of deleterious T cells and employing peripheral blood in a rapidly scalable manufacturing process to treat large cancer patient populations.

On May 12, we will host a T cell Therapy Symposium with Dr. Eric Tran, who generated transformational data showing the potential of TIL therapy as a National Cancer Institute fellow, working with Dr. Steven Rosenberg. Dr. Tran will provide a brief overview of the current T cell therapy landscape, including the evolution of adoptive cell therapy and the need for new approaches to improve patient outcomes. After that, we'll provide an in-depth look at GEN-011, including new data supporting our IND filing.

Let me finally speak to the broader landscape in which we are all operating. We are saddened by the disruption and loss of life caused by the pandemic. Like many companies, COVID-19 more directly affects our way of doing business, too. All but select employees performing essential lab-based functions have been working from home since mid-March. As a consequence, we have had to scale back our critical research activities. I am proud of our team because despite these challenges, we continue to make significant headway on our objectives and look forward to continuing our progress.

I'm now going to pass the call over to Diantha to summarize our financials from this quarter before opening the call up to questions. Diantha?

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Diantha Duvall, Genocea Biosciences, Inc. - CFO [4]

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Thanks, Chip, and good morning, everyone.

We ended the quarter with $26.5 million of cash and cash equivalents. Our operating results for the quarter ended March 31, 2020, are as follows: research and development expenses were $10 million compared to $6.5 million for the same period in 2019; general and administrative expenses were $3.4 million compared to $3 million for the same period in 2019; and our net loss was $12.9 million compared to $15.6 million for the same period in 2019.

We reaffirm our guidance that our existing cash resources will be sufficient to support our operations into the first quarter of 2021. We are optimistic that our clinical progress with GEN-009 and GEN-011 will be meaningful catalysts. However, the COVID-19-related market volatility and the global economic slowdown could have a significant adverse impact on market reactions to our catalysts and our potential ability to raise additional capital. We continually evaluate market dynamics and our business needs during these challenging times as we look to continue to progress our preclinical and clinical programs.

With that, let's now open up the call for questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question is from Ben Burnett with Stifel.

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Benjamin Jay Burnett, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate [2]

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I guess just a quick question on GEN-009. I guess with this study reaching sufficient enrollment in Part B, are you able to give us a sense of what kind of follow-up times we're likely to expect in this first look?

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [3]

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Yes. Thanks, Ben. This is Chip, obviously. I'm going to turn this question to Tom Davis, our Chief Medical Officer, to answer the question.

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Thomas A. Davis, Genocea Biosciences, Inc. - Chief Medical Officer [4]

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We are looking for adequate numbers of patients with the follow-up that would allow us to assess that preliminary activity readout. So it's a small population that we're initially looking at. And of course, in order to have adequate information about the impact of the vaccine, of GEN-009, in each patient, we'll have at least 3 months' follow-up on all of those patients.

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Benjamin Jay Burnett, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate [5]

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Okay. That's fantastic. And if I can just ask one follow-up question on the GEN-011 program. Do you -- I guess now that this is sort of approaching the clinic, do you, at this point, have -- do you anticipate having to lymphodeplete patients and/or administer IL-2? I mean this is something that's done in a lot of TIL programs. So I was just curious how you are thinking about this with regards to GEN-011.

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [6]

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Yes. These are really important questions that the field is debating, not just us, as you can imagine. But I'll have Tom answer our thinking on this question.

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Thomas A. Davis, Genocea Biosciences, Inc. - Chief Medical Officer [7]

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Well, yes, that is a great question. As you noted, both lymphodepletion and IL-2 are thought to be important for specifically TIL therapies. And most of the research have focused on the use of those in this particular technology. However, it's not entirely clear what's necessary both for the field in general, noting that IL-2 is not used for CAR-Ts. I think the question has not been answered. So our clinical trial for GEN-011 will start out with a dose escalation. And at the low dose, we will not be deploying lymphodepletion and IL-2 therapy. We'll essentially be seeing what the GEN-011 cells can do in vivo.

And then we'll dose-escalate up to a more traditional TIL-type regimen that does include lymphodepletion and high-dose IL-2. I think it's important to understand that with our particular technology, since we'll be going after many different targets with a large number of cells, we would hope to be able to generate adequate cell numbers perhaps with lower doses overall, perhaps with less toxic concomitant therapy. So we are hoping at least for our products to be answering your question with actual data.

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Operator [8]

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Your next question is from Daina Graybosch with SVB Leerink.

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Daina Michelle Graybosch, SVB Leerink LLC, Research Division - MD & Senior Research Analyst [9]

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I have two questions. As you've halted enrollment in the GEN-009 study, can you give us a sense of the patient indications that you've enrolled, which tumor types, whether you had any enrolled that were progressed on their checkpoint before adding GEN-009? And then I'll wait for your answer for my second question.

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [10]

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Sure, Daina. Thanks for the question. And once again, I'll hand that to Tom to answer.

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Thomas A. Davis, Genocea Biosciences, Inc. - Chief Medical Officer [11]

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So it's a basket study, as you know. We have 5 tumor types that can be enrolled. And we have had patients from each of those 5 tumor types put on to the study. So at the end of the day, we'll be looking across a spectrum of tumors, some of which are very responsive to checkpoint inhibition, others which are not. We would expect to have data from at least one of each tumor type and more of some. As you might imagine, the tumor types that are less responsive to standard of care in this setting will contain some patients who have progressed, as you asked.

And where possible, we do plan to continue to vaccinate those patients with recurrent or refractory disease to fully estimate the potential of GEN-009 in these settings. As you know, if we do see any evidence of significant tumor regression following vaccination in those refractory patients, then that would certainly be very exciting. But we do also have patients who are controlled well by checkpoint inhibitors. They may be less of a challenge, and we're certainly going to be collecting data there as well.

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Daina Michelle Graybosch, SVB Leerink LLC, Research Division - MD & Senior Research Analyst [12]

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Great. And my second question is more of a scientific theoretical one for GEN-011. I heard more investors asking about the use of synthetic dendritic cells and making polyclonal T cell populations versus the patients' owned dendritic cells. And I wonder if you could talk about what you've explored of GEN-011 and why you've made the choices you've made going forward.

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [13]

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So Daina, the question specifically is why -- if we have used the patients' own dendritic cells versus synthetic and why we made that choice. Is that the question?

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Daina Michelle Graybosch, SVB Leerink LLC, Research Division - MD & Senior Research Analyst [14]

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Yes. And what ultimately we're taking forward in GEN-011. And I realize you might address this a lot more in the upcoming KOL Day as well.

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [15]

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You're absolutely right that we'll have a ton of information in the KOL data, but I think Jess can still speak -- Jess Flechtner, our CSO, can still speak to what we have done and why. So Jess?

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Jessica Baker Flechtner, Genocea Biosciences, Inc. - Chief Scientific Officer [16]

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Daina, thanks for the question. The synthetic APCs are very interesting because it's one more facet that you can control in your manufacturing process. But they have limitations still in -- especially in the fact that they are still HLA-limiting. You can't cover every allele that the patient has today by using synthetic APCs, at least the ones that I'm aware of. And so for our process, we have optimized and really industrialized the ability to use their own antigen-presenting cells that we derive from their peripheral blood in our manufacturing process.

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Operator [17]

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Your next question is from the line of Mike Ulz with Baird.

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Michael Eric Ulz, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [18]

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Just had one on GEN-009. You're guiding to like preliminary Part B data in the third quarter. Are you thinking more of a top line release? Are you targeting a particular medical meeting? And then just secondly, a follow-up on some of the earlier questions in terms of what to expect with that data. I think, Tom, you characterized the number of patients as small. But I don't know if you can maybe give us a little more clarity on what you mean by that.

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [19]

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Yes. Mike, thanks for the questions. I'll have Tom take both of those questions.

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Thomas A. Davis, Genocea Biosciences, Inc. - Chief Medical Officer [20]

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Yes. So we want to have an adequate number of patients that would allow us to look for a signal and clearly identify it. We have accrued very effectively to the trial. And as you've heard, we've halted accrual for the time being. And we'll see what patients complete through the process by the time we want to present data. To answer your question though, we're expecting to have somewhere between 10 and 20 patients, enough patients at least to be able to see some activity in this setting. And of course, as you know, our specific focus here is going to be looking for specific changes in tumor bulk after initiation of vaccination. So each of those patients will be serving as their own control. And any evidence of a change after the initiation of vaccination should represent a true contribution from the vaccine itself using fairly careful analysis.

So we do think that since we're not going to be comparing against historic controls with this number of patients, we should be able to get a clear sense of whether or not we're significantly altering the course of disease. As far as where we would present, times are somewhat unpredictable now, sometime in Q3, as you heard. There are several meetings that could be applied. But of course, if timing is such that it's more appropriate for us to present it separate from an academic meeting, we could do that. So as it stands right now, we're not giving specific guidance as to where we would be sharing the data with you. But certainly, we're on track, as Chip said, and are expecting to be able to share it with you in Q3.

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Operator [21]

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Your next question is from the line of Gil Blum with the Needham & Company.

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Gil Joseph Blum, Needham & Company, LLC, Research Division - Analyst [22]

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Just a couple from me. First of all, it seems that GEN-011 is still fully on track for -- to begin enrollment. Do you guys expect any logistical technical difficulties, considering the ongoing pandemic?

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [23]

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Thanks, Gil, for the question. It's, of course, challenging to look ahead with great confidence, given all of the uncertainty surrounding the pandemic. But I will say that, generally speaking, what we have found from the GEN-009 clinical trial experience is that cancer care continues to be prioritized, first of all. And second of all, that our team has done just a terrific job of sweating the details and ensuring that our supply chain holds together. And our partners in the supply chain also are sweating the detail. So we are, I think, guardedly optimistic that we would be able to operate the GEN-011 supply chain much as we have done so for GEN-009. But I think once we initiate the clinical trial months from now, we'll be able to provide more concrete guidance and granularity on the whats and whens for patient data there.

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Gil Joseph Blum, Needham & Company, LLC, Research Division - Analyst [24]

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I appreciate that. And just another one, I mean, considering the uncertainties around financial markets, are you guys looking at partners these days?

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [25]

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Of course, we were looking at partners before the current uncertainty in the capital market. And so we continue to evaluate both product-specific partnership opportunities, meaning GEN-011 or GEN-009, as well as the possibility that our ATLAS platform may be of value to potential partners for their own programs, presumably not competitive with GEN-009 and GEN-011. And so as we think about capital strategy, that is a vital way in which we can advance the story alongside things like issuing new capital.

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Operator [26]

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And your next question is from the line of Joe Pantginis with H.C. Wainwright.

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Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [27]

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I hope everyone is doing well at the company, and no one has any direct impacts at this point. One question on -009 and one on -011. So just quickly on -009, just wanted to make sure it certainly sounds like you'll have a decent early dataset, as Tom was talking about, in 10 to 20 patients. But I just wanted to make sure, was there any impact by COVID on making the decision to pause enrollment because even though cancer studies continue, the earlier studies have been impacted.

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [28]

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Joe, thanks for the sentiment, of course, and also thank you for the question. Tom, I'll let you handle that question.

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Thomas A. Davis, Genocea Biosciences, Inc. - Chief Medical Officer [29]

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Sure. Thanks, Joe. So this is a preplanned interim, although not a formal analysis. We have accrued quite well. I think it's wonderful both that the patients, of course, are interested in participating in this and the sites have been actively capturing patients, and we've accrued a very good number. And we effectively are executing on our previous plan for this interim analysis. As you might imagine, there are multiple impacts by COVID. As you can certainly read in any discussion of clinical trials these days, there may be some data that are missing from the final set. But we're completely focused on capturing the tumor bulk, the RECIST measurements as well as the spider plots that are going to be the core of our data reading out. So I think in the big picture, we're right on plan with the trial. We're not shortening things because of COVID. And we will be able to compensate for any compromises that do come along the way because of the current pandemic.

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Joseph Pantginis, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [30]

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Got it. I appreciate that. And then on -011, you touched on it very briefly during these talks here, and I'm sure we'll hear more on May 12. But just want to talk about manufacturing a second, and Jess touched on this as well. When you look at the evolution of TIL therapies, whether it's Iovance's that evolved from NCI or beyond, a key investor question has always been, do you have commercial manufacturing ready to go? So the fact that you're getting these from peripheral blood is an important step. Jess, I believe you mentioned that you have an industrialized process. So I guess what are some of the outstanding steps to be able to have a commercial manufacturing process in hand for -- upon approval? And how should we look at it overall?

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [31]

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Yes, Joe. So thanks for the question. You're highlighting an important point in the dream of making an effective cell therapy available to as many patients as possible. We will provide much more color on this point on May 12. But for now, what I will say is that by design, we have made a process that we think is scalable today. And so I think the point here is that we're not requiring, we believe, substantial process innovation if we wanted to go from the small scale of the proposed clinical trial to something that would be if obviously, if it works, commercializable immediately. We think that process itself could work. And so we'll speak in a couple of weeks to the specific elements of the process and why this is the case.

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Operator [32]

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And at this time, there are no further questions.

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [33]

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So with that then, I will say thank you, operator, and thank you to everyone for joining us today.

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Operator [34]

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Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and have a wonderful day. You may all disconnect.