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Edited Transcript of GNCA earnings conference call or presentation 25-Jul-19 12:30pm GMT

Q2 2019 Genocea Biosciences Inc Earnings Call

Cambridge Aug 5, 2019 (Thomson StreetEvents) -- Edited Transcript of Genocea Biosciences Inc earnings conference call or presentation Thursday, July 25, 2019 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

* 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

* Gil Joseph Blum

Needham & Company, LLC, Research Division - 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 Biosciences Second Quarter 2019 Financial Results. (Operator Instructions).

And without further delay, I would like to hand over the program to Mr. Dan Ferry. Sir, you may begin.

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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 the prepared remarks, we'll open up the call for Q&A, and Chip; Diantha; Tom Davis, Genocea's Chief Medical Officer; and Jess 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 forecasts 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 2018 annual report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission.

It is 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. The second quarter was huge for Genocea, highlighted by our ASCO data presentation in June, where we were selected as one of the top 10 immuno-oncology abstracts by ASCO's Journal of Clinical Oncology.

Just as critically, we've seen a shift in perception since then in 2 ways: first, there's growing recognition that our ATLAS platform represents the state-of-the-art for neoantigen selection, uniquely allowing us to select, not predict, neoantigens to which patients already respond; second, there is growing acceptance of the existence and importance of inhibitory neoantigens, which only ATLAS can identify, and which, therefore, offer both opportunities for continued differentiation and for interesting partnerships.

Let me remind you that the GEN-009 immunogenicity data we presented at ASCO prospectively validated our neoantigen selection approach, confirming that ATLAS enables best-in-class immune responses in cancer patients. Just as importantly, GEN-009 amplified patient antitumor CD8 and CD4 T cell responses to those neoantigens.

With these exciting data in hand, we have started Part B of our Phase I/IIa clinical trial, which we designed to demonstrate that these broad and strong antitumor immune responses can shrink tumors in cancer patients treated with GEN-009, plus the standard-of-care immune checkpoint inhibitor for each type of cancer. We anticipate that we'll provide initial efficacy results in mid-2020 for Part B.

During the quarter, we also announced that we had entered into a research collaboration with Iovance to explore the potential utility of ATLAS in the development of next-generation neoantigen-targeted TIL, or tumor infiltrating lymphocyte, cell therapies.

We've continued to advance GEN-011, our own neoantigen-specific adoptive cell therapy derived from patient PBMCs and intend to file an IND for it in the first half of 2020.

Looking ahead, we've just received word that our GEN-009 abstract was accepted for a poster discussion at this year's ESMO meeting in late September. There, we'll provide additional GEN-009 patient immune response and safety data and also offer more insights into those responses from ATLAS. Needless to say, we are very excited that our approach is gaining traction and look forward to updating you on our progress in the coming quarters.

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. Our operating results for the quarter ended June 30, 2019, are as follows. R&D expenses were $6.8 million compared to $5.3 million for the same period in 2018. G&A expenses were $3.2 million compared to $4.5 million for the same period in 2018. And our net loss was $6.5 million compared to a net loss of $4.4 million for the quarter ended June 30, 2018.

During the quarter, we also raised more than $42 million in gross proceeds from a public equity financing. We ended the second quarter with $58.7 million in cash and cash equivalents, extending our cash runway into 2021.

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) And our first question is from Ben Burnett from Stifel.

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

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I have just 2 questions. First question, I guess in the Phase I update later this year at ESMO regarding Cohort A, how many patients do you expect to be included in that update? And I guess can we expect the same type of immunogenicity data that we saw at ASCO?

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

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Yes. Ben, this is Chip. I'm going to have Tom, our Chief Medical Officer, answer that question.

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

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Ben, as you know, we were able to present the immunogenicity data on 5 patients at ASCO. And since then, we've had an additional 3 patients who'll be giving us data that should be available in time for the ESMO presentation. So you can look for fairly complete data on 8 patients.

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

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Okay. Okay. Great. I guess I just -- I also had a question about the Part B readout expected next year. I guess, is that still expected mid-next year? Apologize if I missed that. And I was also wondering if you could just speak to kind of the design of the study. I guess, specifically, when we do get data, how will the design of the study enable us to differentiate efficacy from the vaccine versus background therapy, such as checkpoint inhibitors?

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

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Yes. Ben, I'll reiterate our guidance that we expect data in the middle of next year. When exactly will, of course, depend on both the pace with which we enroll patients and the speed with which we manufacture the vaccine, and we'll provide ongoing updates as we progress. I will have Tom answer the question of the Part B readout and, specifically, how we would intend to differentiate between the vaccine effect and checkpoint inhibitor effect. Tom?

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

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So obviously, that's one of the challenges in the field and the question, the issue comes up constantly as you can imagine. But I think what we're seeing with data so far is that there's not a clear signal of activity, which makes it difficult to separate from the innate activity of the checkpoint inhibitor regimens. So people should recognize the fact that if there is a clear treatment effect, you'll be able to see it in the data.

But what's most important is to clearly define what has happened before a vaccine is given and what happens after, and determine whether that changes. When you look at it as a group phenomenon, you have to look at the statistics, the totality of responses, and it requires comparison to really tell if there's a benefit.

But if instead you look at individual patients and carefully assess their prognostic factors, what happens to them in the months before they receive the vaccine and then what changes thereafter, you can better identify if there is a treatment effect for each individual and then, of course, add them cumulative to see what the overall effect is.

So our focus rather than simply looking at overall response rates, perhaps, identifying which were due to the checkpoint inhibitor and which were not, we'll be focused on individuals and attempting to identify which specific ones appear to have both immunologic and clinical shrinkage that happens in parallel.

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Operator [8]

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And the next question is from Chad Messer from Needham & Company.

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Gil Joseph Blum, Needham & Company, LLC, Research Division - Analyst [9]

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This is Gil, on for Chad. And congrats on the progress. Just a bit of a follow-on, on Ben's question here. So at ESMO, we'll get more immunogenicity data. Are we going to see at some point some progression-related data?

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

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Gil, just to clarify, you're asking if we're going to have progression data from those Part A patients, I assume?

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Gil Joseph Blum, Needham & Company, LLC, Research Division - Analyst [11]

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Yes. Not that, that helped clearly, but in...

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [12]

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Right. No, sure. I got it. Thanks, Gil. I'll have Tom answer that question.

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Thomas A. Davis, Genocea Biosciences, Inc. - Chief Medical Officer [13]

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Sure. At the presentation, we'll be able to update on the status of the patients at the time we give the presentation. I would remind everybody that these patients are in remission after having had adjuvant therapy for their disease. So it's very hard to predict who will progress, who won't and how rapidly that will happen. But certainly, as a strong trend for patients to not relapse, we'll be very interested in those outcomes.

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Gil Joseph Blum, Needham & Company, LLC, Research Division - Analyst [14]

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Excellent. And another question is, these are pretty impressive immunogenicity results for the kind of adjuvant that you guys have been using. Any thoughts on using other adjuvants or other delivery systems for your vaccine?

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

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Yes. Thanks, Gil. I'll handle that. As I think most people on the call understand we have, in addition to GEN-009, the current vaccine in development as well as GEN-011, our neoantigen cell therapy, for which we intend to file an IND in the first half of next year, we also have our GEN-010 program in which we are exploring alternate delivery and/or adjuvant program technologies. We obviously have not yet disclosed the specifics therein.

I think the thinking behind this is that we want to have a second program to build on any particular opportunities for improvement that may arise from the GEN-009 program. I think, generally speaking, what we want from a cancer vaccine is to have broad and strong immune responses that lead to strong clinical benefit. We want to be able to deliver the vaccine as quickly and as cheaply as possible in addition to that.

Thus far, we're really quite pleased with the performance of GEN-009 using, as you've said, synthetic long peptides plus poly ICLC. We think the breadth, the nature and the magnitude of the response has been quite compelling. And so I think it's going to take the clinical readout from the ongoing clinical study to determine the degree to which we would want to emphasize our investment on GEN-010. So we're very excited about GEN-009, we're very excited about GEN-011, and GEN-010 is potentially waiting in the wings as needed.

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Operator [16]

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The next question is from Mike Ulz from Baird.

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Michael Eric Ulz, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [17]

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Congrats as well on starting Part B. So maybe just a quick follow-up on Part B here. Just in terms of the protocol, are you guys restricting the use of the checkpoint inhibitor to say, for example, KEYTRUDA? Or is it more flexible?

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [18]

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Yes. Thanks, Mike, for the question. Tom?

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Thomas A. Davis, Genocea Biosciences, Inc. - Chief Medical Officer [19]

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Yes. Our goal is really to see what the vaccine can add to standard-of-care, which, of course, gives you the easiest path forward and the best data that you can identify to compare to for the readout.

So the trial was designed to incorporate 5 different tumor types, and those patients will have access to the current standard-of-care PD-1-based regimens that would be appropriate in their particular situation. And then we will be able to add the vaccine at an appropriate time in the disease course.

In some ways, we sort of leapfrogged what others have done in the space. Rather than simply combining simply with PD-1 to see what happens, we're basically now building on what is standard-of-care somewhat similar to trials that others are progressing to. Results of these, of course, will need to take into account the differences between the standard-of-care regimens. But we think with the continuum of data that come from these patients, we'll be able to tease out what the benefits are and identify clinical benefits when they come through.

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Michael Eric Ulz, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [20]

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Got you. And maybe if you can just comment on the -- you've mentioned the multiple cohorts, can you give us a sense of the patient numbers you're targeting there?

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [21]

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Thanks, Mike. Tom?

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Thomas A. Davis, Genocea Biosciences, Inc. - Chief Medical Officer [22]

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Yes. The trial is designed to have 5 cohorts, which include lung cancer, head and neck, melanoma, urothelial and renal carcinomas. Those groups are designed to identify initial signals taking up to 15 patients each. And there will be a separate group of patients who have proven themselves refractory to checkpoint inhibitors who will similarly receive vaccination in order to determine what the impacts can be in those patients.

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Operator [23]

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(Operator Instructions) I am showing no further questions at this time. I would like to turn the conference back to Mr. Chip Clark.

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William D. Clark, Genocea Biosciences, Inc. - President, CEO & Director [24]

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Thank you, operator. And thanks, again, everyone, for joining us today.

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Operator [25]

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