On August 4, 2023 Precision BioSciences, Inc. (Nasdaq: DTIL), a clinical stage gene editing company developing ARCUS-based in vivo gene editing and ex vivo allogeneic CAR T therapies, reported financial results for the second quarter ended June 30, 2023 and provided a business update (Press release, Precision Biosciences, AUG 4, 2023, View Source [SID1234633827]).
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"The first half of 2023 has been a busy time at Precision. Key updates have continued to elucidate the development and potential regulatory pathway for our ex vivo portfolio as well as demonstrate the potential of our proprietary ARCUS genome editing platform as a differentiated technology for high efficiency in vivo gene insertion and excision," said Michael Amoroso, Chief Executive Officer at Precision BioSciences. "Following our recent CAR T data update in May 2023 and subsequent Type B End of Phase 1 meeting with the U.S. Food and Drug Administration (FDA), we are actively engaging with potential partners to advance azer-cel and PBCAR19B to the next stage of development. As we prioritize organic development of our in vivo portfolio, we continue to generate supportive preclinical data to leverage the core features of ARCUS and advance differentiated programs to the clinic. We look forward to providing further updates across our in vivo programs at our upcoming gene editing R&D event in September."
Ex Vivo Allogeneic CAR T Platform
In July 2023, Precision received final meeting minutes from its June 2023 Type B meeting with the FDA for azer-cel. The objective of the meeting was to gain further clarity on the potential registration path for azer‑cel including study design, endpoints, and the recommended phase 2 dose in the CAR T relapsed patient setting. The discussion with the FDA provided clarity on azer-cel development, including a potential pathway toward registration. Based on the advice received from the FDA and clinical data shared during the May 2023 CAR T update, Precision is currently advancing discussions with multiple potential strategic partners for its cell therapy assets, including hematologic and non-hematologic applications.
In Vivo Gene Editing Platform
ARCUS may have broad utility in many diseases and the Company believes ARCUS is uniquely suited for in vivo gene editing, including the potential to produce a profound impact on diseases that are best treated by therapeutic gene insertion or excision of large defective gene sequences.
Chronic Hepatitis B: Precision is developing PBGENE-HBV for the treatment of patients with chronic hepatitis B with the goal of submitting a clinical trial application (CTA) and/or investigational new drug (IND) application in 2024. Hepatitis B virus (HBV) causes inflammation and damage to the liver, which can lead to chronic infection and increased risk of death from liver cancer or cirrhosis. There is no cure for chronic hepatitis B and current treatments rarely result in a functional cure, primarily due to persistence of viral DNA in the liver. In patients with chronic HBV infection, genetic material of the virus is converted within infected liver cells into covalently closed circular DNA (cccDNA) that acts as a template to make HBV copies. HBV also inserts its DNA into the human genome of infected liver cells. This integrated HBV DNA is a primary source of the viral protein, hepatitis B surface antigen (HBsAg), which is secreted in the blood. The presence of HBsAg is associated with poorer outcomes, and elimination of HBsAg, along with loss of circulating HBV DNA, is necessary for achieving a functional cure of chronic hepatitis B. Using ARCUS, Precision scientists have generated a highly specific nuclease designed to eradicate chronic HBV infection. The Company believes PBGENE-HBV is the only approach designed to inactivate and immediately eliminate cccDNA with direct edits as well as to inactivate integrated HBV DNA with the goal of long-lasting reductions in HBsAg and HBV DNA.
In June 2023, the Company presented data at the European Association for Study of the Liver (EASL) Congress. In an episomal adeno-associated virus (AAV) mouse model, Company researchers demonstrated that administration of lipid nanoparticles containing mRNA encoding an HBV-targeted ARCUS nuclease resulted in a 96% reduction in serum HBsAg. In a follow-on experiment, treatment of HBV-infected primary human hepatocytes with the HBV-targeted ARCUS nuclease resulted in a 90% reduction of cccDNA and high specificity. The Company plans to present additional data during its in vivo gene editing R&D event in September and at subsequent scientific conferences in 2023.
Novartis Partnered Program: Precision continues to advance an in vivo gene insertion 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 a therapeutic transgene in vivo as a potential one-time transformative treatment administered directly to the patient that, if successful, would overcome many of the hurdles present today with other therapeutic technologies, including those that are utilizing an ex vivo gene editing approach.
Prevail Partnered Programs: Precision continues to progress 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 Duchenne muscular dystrophy (DMD) in muscle, a central nervous system directed target, and a liver 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. In May 2023, the Company presented in vivo proof-of-concept data in preclinical models at the American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper) 26th Annual Meeting demonstrating the therapeutic potential of PBGENE-DMD, including excision and repair of large sections of DNA. Precision scientists observed the edited dystrophin variant in multiple tissue types frequently involved in progression of DMD, including skeletal muscle, heart, and diaphragm, enabling significant functional muscle improvement.
In June 2023, Precision and Prevail entered into an amended and restated development and license agreement to continue to collaborate on developing the Company’s ARCUS nucleases for potential in vivo therapies for genetic disorders. Precision will continue to oversee creation, selection, in vitro development, and optimization of ARCUS nucleases with respect to the gene targets subject to the collaboration. Prevail will oversee and fund preclinical research and IND-enabling activities which were previously to be conducted by the Company at its expense. Prevail retains responsibility for conducting clinical development and commercialization activities for products from the collaboration. The Company will be eligible to receive milestone payments of up to an aggregate of $390 million to $395 million per licensed product, a decrease from $420 million as provided in the Original Agreement. This change reflects Prevail’s increased involvement in pre-clinical activities.
Ornithine Transcarbamylase (OTC) Deficiency: Led by iECURE, an ARCUS-mediated gene insertion approach is being pursued as a potential treatment for neonatal onset OTC deficiency. Non-human primate (NHP) data has been presented by researchers from the University of Pennsylvania’s Gene Therapy Program demonstrating sustained gene insertion of a therapeutic OTC transgene one-year post-dosing in newborn and infant NHP with high efficiency. iECURE is targeting submission of a CTA and/or IND in the second half of 2023.
Quarter Ended June 30, 2023 Financial Results:
Cash and Cash Equivalents: As of June 30, 2023, Precision had approximately $137.8 million in cash and cash equivalents. The Company expects that existing cash and cash equivalents, expected operational receipts, and available credit will be sufficient to fund its operating expenses and capital expenditure requirements through the first quarter of 2025.
Revenues: Total revenues for the quarter ended June 30, 2023 were $19.8 million, as compared to $3.8 million for the same period in 2022. The increase of $16.0 million was the result of a $11.2 million increase in revenue recognized from Prevail, $10.7 million of which was the result of a cumulative catch-up adjustment under the amended development and license agreement, and an increase of $4.8 million in revenue recognized under the Novartis Agreement.
Research and Development Expenses: Research and development expenses were $21.9 million for the quarter ended June 30, 2023, as compared to $22.9 million for the same period in 2022. The decrease of $1.0 million was primarily due to decreases in PBCAR19B external development, outsourced research and development, employee-related costs, and contract manufacturing organization expenses partially offset by increases in in vivo external development and azer-cel external development costs.
General and Administrative Expenses: General and administrative expenses were $9.8 million for the quarter ended June 30, 2023, as compared to $10.4 million for the same period in 2022. The decrease of $0.6 million was primarily driven by a decrease in share-based compensation expense and expense management, including a reduction in director and officer insurance premiums.
Net Loss: Net loss was $11.9 million, or $(0.10) per share (basic and diluted), for the quarter ended June 30, 2023, as compared to a net loss of $31.0 million, or $(0.46) per share (basic and diluted), for the same period in 2022. Weighted average shares of common stock outstanding were approximately 114.1 million for the quarter ended June 30, 2023, as compared to approximately 68.0 million for the quarter ended June 30, 2022. The increase in weighted average shares of common stock outstanding was primarily due to a $50 million underwritten offering of common stock and Novartis’ $25 million equity investment in 2022.