On November 7, 2023 Precision BioSciences, Inc. (Nasdaq: DTIL), an advanced gene editing company utilizing its novel proprietary ARCUS platform to develop in vivo gene editing therapies for sophisticated gene edits, including gene insertion, excision, and elimination, reported financial results for the third quarter ended September 30, 2023 and provided a business update (Press release, Precision Biosciences, NOV 7, 2023, View Source [SID1234637155]).
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"The ARCUS platform has always been foundational to Precision, as we have harnessed its distinct properties in pursuit of life changing medicines for patients. Our recent transaction with Imugene allows Precision to focus the power of ARCUS on in vivo gene editing while capturing near-term and potential long-term value for our CAR T assets," said Michael Amoroso, Chief Executive Officer at Precision BioSciences. "At our recent R&D Day, we featured data demonstrating how the differentiated cut, size, and simplicity of ARCUS enable it to uniquely carry out sophisticated edits that present clear advantages in the market and compelling therapeutic opportunities versus other editing technologies. By design, ARCUS has been shown to preferentially drive higher efficiency gene insertion than CRISPR-derived editors, and its ease of delivery and simplicity confer greater utility in reaching tissues, organs, and organelles for gene insertion, excision and elimination. Going forward, Precision will solely focus its own efforts on programs leveraging ARCUS’ specific utility for sophisticated edits. To that end, we are progressing wholly-owned PBGENE-HBV and PBGENE-PMM programs towards anticipated CTA and/or IND filings in 2024 and 2025, respectively. In addition, the ARCUS OTC gene insertion program being developed by our partner at iECURE is targeting a CTA and/or IND filing by the end of this year. Importantly, as we execute against our singular focused in vivo strategy, we believe we will have sufficient capital to advance these wholly-owned programs into the clinic and to Phase 1 data points over the next two years."
Completed Strategic Transaction with Imugene for Azer-Cel in Cancer
In August 2023, the Company completed a strategic transaction with Imugene Limited (ASX: IMU) for the Company’s lead allogeneic chimeric antigen receptor (CAR) T candidate for cancer, azercabtagene zapreleucel (azer-cel). In exchange for global rights to azer-cel for cancer, as well as Precision’s CAR T infrastructure and experienced cell therapy teams, Precision received upfront cash and equity consideration valued at $21 million. In addition, Precision is eligible for a potential $8 million near-term milestone payment, up to $198 million in additional milestone payments and double-digit royalties on net sales of azer-cel, as well as $145 million in milestone payments and tiered royalties for up to three additional research programs to be potentially developed by Imugene. Imugene has assumed ongoing clinical execution for azer-cel in the large B-cell lymphoma population who have relapsed following autologous CAR T treatment.
Advancing as a Single Platform Company Focused on ARCUS In Vivo Gene Editing
Precision is now solely focused on leveraging its proprietary ARCUS genome editing platform to advance in vivo gene editing programs that go beyond gene knockouts in the liver and carry out more sophisticated edits such as gene insertions, gene excision, and gene elimination unlocking a broader potential for ARCUS in vivo gene editing in human therapeutics.
In support of the go-forward strategy, Precision presented two poster presentations at the European Society of Gene & Cell Therapy congress on October 25 and 26, 2023, in Brussels, Belgium, "Unique features of ARCUS nucleases enable high efficiency, targeted gene insertion in vivo" and "ARCUS-mediated excision of the "hot spot" region of the human dystrophin gene results in functional improvement in a mouse model of Duchenne muscular dystrophy (DMD)."
Wholly-owned Portfolio
PBGENE-HBV (Viral Elimination Program): Precision is developing PBGENE-HBV for the treatment of patients with chronic hepatitis B and expects to submit a clinical trial application (CTA) and/or investigational new drug (IND) application in 2024.
Chronic infection with hepatitis B virus (HBV) is due to persistence of the viral genome, in the form of covalently closed circular DNA (cccDNA) and viral sequences integrated into the human genome. Current treatments for chronic hepatitis B rarely achieve a functional cure, defined as sustained undetectable levels of circulating hepatitis B surface antigen (HBsAg) and HBV DNA after a finite course of treatment, as they do not eliminate the root cause of viral persistence. In September 2023, at its R&D Day, the Company shared data highlighting the potential of PBGENE-HBV to drive sustained reductions of circulating HBsAg and HBV DNA. Unlike other therapies in development, PBGENE-HBV directly eliminates cccDNA and inactivates integrated viral sequences, representing a potentially curative approach.
A late-breaking abstract featuring preclinical data on the PGBENE-HBV program has been accepted for a poster presentation, "Preclinical efficacy and safety of ARCUS-POL nucleases for chronic hepatitis B: a potentially curative strategy," at the American Association for the Study of Liver Diseases (AASLD) Annual Meeting being held in Boston on November 10-14, 2023.
PBGENE-PMM (Mutant Mitochondrial Elimination Program): At its R&D Day, Precision announced that it will pursue development of PBGENE-PMM as a potential first-in-class opportunity for treatment of m.3243-associated primary mitochondrial myopathy (PMM). Mitochondrial diseases are the most common hereditary metabolic disorder, affecting 1 in 4,300 people. PMM currently lacks a curative treatment and impacts approximately 50% of patients with mitochondrial disease. The high specificity and simplistic, single component nature of Precision’s mitoARCUS nucleases are designed to enable specific editing to eliminate mutant mitochondrial DNA while allowing normal (wild-type) mitochondrial DNA to repopulate in the mitochondria and restore normal function. Precision is targeting to submit a CTA and/or IND in 2025 for PBGENE-PMM.
In September 2023, Precision received a Notice of Allowance from the U.S. Patent and Trademark Office (USPTO) for U.S. Patent Application No. 18/161,560, titled "Engineered Meganucleases That Target Human Mitochondrial Genomes." The allowed composition of matter claims encompass a mitochondria-targeted ARCUS nuclease (mitoARCUS) that is designed to specifically target, cleave, and eliminate mutant mitochondrial DNA comprising an m.3243A>G mutation.
Partnered Programs
iECURE-OTC (Gene Insertion Program): Led by iECURE, an ARCUS-mediated gene insertion approach is being pursued as a potential treatment for neonatal onset ornithine transcarbamylase (OTC) deficiency. Non-human primate (NHP) data presented in October 2022 by researchers from the University of Pennsylvania’s Gene Therapy Program demonstrated sustained gene insertion of a therapeutic OTC transgene one-year post-dosing in newborn and infant NHPs with high efficiency. iECURE expects to submit a CTA and/or IND in the second half of 2023.
PBGENE-NVS (Gene Insertion Program): Precision continues to advance its in vivo gene editing program with Novartis to develop a custom ARCUS nuclease for patients with hemoglobinopathies, such as sickle cell disease and beta thalassemia. The collaborative intent is to insert, in vivo, a therapeutic transgene into hematopoietic stem cells as a potential one-time transformative treatment administered directly to the patient that would overcome many of the hurdles present today with other therapeutic technologies, including ex vivo gene editing approaches.
PBGENE-DMD (Gene Excision Program): Precision continues its in vivo gene editing collaboration with Prevail Therapeutics, a wholly-owned subsidiary of Eli Lilly and Company, in applying ARCUS nucleases to three initial targets, including DMD in muscle, a liver-directed target, and a central nervous system-directed target. The goal of the PBGENE-DMD program is to utilize a pair of ARCUS nucleases, delivered by a single AAV, that are designed to excise an approximately 500,000 base pair mutation "hot spot" region from the dystrophin gene to generate a variant of the dystrophin protein that is functionally competent. During its September 2023 R&D Day, the Company highlighted preclinical data demonstrating the potential of ARCUS in vivo gene editing for large gene excisions and that the edited dystrophin variant was observed in multiple tissue types frequently involved in progression of DMD, including skeletal muscle, heart, and diaphragm, thereby enabling significantly improved muscle function.
Quarter Ended September 30, 2023 Financial Results:
In August 2023, the Company announced its final stages of execution to operate as a single platform company focused exclusively on developing in vivo gene editing therapies with the completion of the strategic transaction with Imugene for azer-cel for cancer. Precision determined that the decision to only pursue development of CAR T cell therapies through partnerships qualified for discontinued operations accounting treatment. Accordingly, the accompanying financial statements for all periods presented reflect Precision’s CAR T cell therapy business as a discontinued operation.
Cash and Cash Equivalents: As of September 30, 2023, Precision had approximately $122.2 million in cash and cash equivalents. The Company expects that existing cash and cash equivalents, expected operational receipts, including upfront consideration received from Imugene, operational efficiencies gained from divestment of the CAR T business, availability of the ATM facility, and available credit will be sufficient to fund its operating expenses and capital expenditure requirements through the end of 2025. The Company expects its cash runway to be sufficient to achieve first-in-human Phase 1 clinical data for its lead in vivo gene editing programs.
Revenues: Total revenues for the quarter ended September 30, 2023 were $13.1 million, as compared to $7.4 million for the same period in 2022. The increase of $5.7 million in revenue during the quarter ended September 30, 2023 was primarily the result of an increase of $4.0 million in revenue recognized under the Novartis Agreement and an increase of $1.7 million in revenue recognized under the Prevail Agreement.
Research and Development Expenses: Research and development expenses were $15.9 million for the quarter ended September 30, 2023, as compared to $11.8 million for the same period in 2022. The increase of $4.1 million was primarily due to $5.1 million in expenses related to initiating CTA/IND-enabling studies for the PBGENE-HBV development program planned for CTA/IND submission in 2024, offset by decreases in laboratory supplies and services and share-based compensation expense. R&D expenses in the quarter ended September 30, 2023 are not necessarily indicative of future spend as work may fluctuate quarter to quarter in the pre-CTA/IND phase.
General and Administrative Expenses: General and administrative expenses were $9.6 million for the quarter ended September 30, 2023, as compared to $10.3 million for the same period in 2022. The decrease of $0.7 million was primarily due to a decrease in share-based compensation expense offset by an increase in information technology expenses.
Interest Income/Expense: Interest expense was $0.6 million for the quarter ended September 30, 2023 compared to $0.4 million for the same period in 2022, primarily due to higher interest rates on our debt.
Interest income was $1.9 million during the quarter ended September 30, 2023 compared to $1.2 million for the same period in 2022. The increase in interest income was primarily the result of higher interest rates on our cash and cash equivalents compared to the three months ended September 30, 2022.
Discontinued Operations: Income from discontinued operations was $4.0 million during the three months ended September 30, 2023 compared to an $8.3 million loss during the three months ended September 30, 2022. The $12.3 million increase was the result of the $8.4 million gain on sale of our CAR T infrastructure to Imugene and a $3.9 million decrease in cell therapy expenses during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022.
Net Loss: Net loss was $8.1 million, or $(0.07) per share (basic and diluted), including $4.0 million income from discontinued operations for the quarter ended September 30, 2023. Net loss was $23.9 million, or $(0.22) per share (basic and diluted), including a $8.3 million loss from discontinued operations for the same period in 2022.